EDGAR 10-K Filing

Company CIK: 731653
Filing Year: 2023
Filename: 731653_10-K_2023_0001410578-23-000281.json

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ITEM 1. BUSINESS

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
Smaller Reporting Companies are not required to provide this disclosure.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.
Item 2Properties
The Company owns and operates its Main Office and stand alone operations center in Martins Ferry, Ohio and the following offices:
Branch Office Location
Owned or Leased
Location
Owned or Leased
Bridgeport, Ohio
Owned
Sherrodsville, Ohio
Owned
Colerain, Ohio
Owned
Glouster, Ohio
Owned
Jewett, Ohio
Owned
Nelsonville, Ohio
Owned
St. Clairsville, Ohio
Owned
Lancaster, Ohio
Owned
Dover, Ohio
Owned
Lancaster, Ohio
Owned
Dellroy, Ohio
Owned
Powhatan, Ohio
Owned
New Philadelphia, Ohio
Owned
Moundsville, WV
Owned
Strasburg, Ohio
Owned
St. Clairsville, Ohio
Owned
Tiltonsville, Ohio
Owned
Management believes the properties described above to be in good operating condition for the purpose for which they are used. The properties are unencumbered by any mortgage or security interest and are, in management’s opinion, adequately insured.
Item 3Legal Proceedings
There are no material legal proceedings, other than ordinary routine litigation incidental to its business, to which the Company or its subsidiary is a party or to which any of its property is subject.
Item 4Mine Safety Disclosures
Not applicable.
PART II
Item 5Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Refer to Page 9, “Shareholder Information” of the 2022 Annual Report To Shareholders filed herewith as Exhibit 13 and refer to Page 31, Note 1 of the Notes to the Consolidated Financial Statements of the Company in the 2022 Annual Report To Shareholders for common stock trading ranges, cash dividends declared and information relating to dividend restrictions, which information is incorporated herein by reference. Additional disclosure regarding dividend restrictions is also included under Part I, Item 1 of this 10-K in the section captioned “Supervision and Regulation.”
ISSUER PURCHASES OF EQUITY SECURITIES
(c)
(d)
Total Number of
Maximum Number
Shares (or Units)
(or Approximate Dollar Value) of
(a)
(b)
Purchased as Part
Shares (or Units)
Total Number of
Average Price
of Publicly
that May Yet Be
Shares (or Units)
Paid per Share
Announced Plans
Purchased Under the
Period
Purchased
(or Unit)
or Programs
Plans or Programs
Month #l 10/1/2022 to 10/31/2022
-
$
-
-
-
Month #2 11/1/2022 to 11/30/2022
-
-
-
-
Month #3 12/1/2022 to 12/31/2022
2,885
(1)
15.41
-
-
Total
2,885
(1)
$
15.41
-
-
(1)
All of these shares were purchased by the Company on the open market to fund acquisitions under the Company’s Directors and Officers Deferred Compensation Plan.
Unregistered Sales of Equity Securities and Use of Proceeds
The Company adopted the United Bancorp, Inc. Affiliate Banks Directors and Officers Deferred Compensation Plan (the “Plan”), which is an unfunded deferred compensation plan. Amounts deferred pursuant to the Plan remain unrestricted assets of the Company, and the right to participate in the Plan is limited to members of the Board of Directors and Company officers. Under the Plan, directors or other eligible participants may defer fees and up to 50% of their annual cash incentive award payable to them by the Company, which are used to acquire common shares which are credited to a participant’s respective account. Except in the event of certain emergencies, no distributions are to be made from any account as long as the participant continues to be an employee or member of the Board of Directors. Upon termination of service, the aggregate number of shares credited to the participant’s account are distributed to him or her along with any cash proceeds credited to the account which have not yet been invested in the Company’s stock. During the quarter ended December 31, 2022, the Plan purchased 2,855 shares at an average cost of $15.41, which were allocated to participant accounts. All purchases under the Plan are funded with either earned director fees or officer incentive award payments. No underwriting fees, discounts, or commissions are paid in connection with the Plan. The shares allocated to participant accounts under the Plan have not been registered under the Securities Act of 1933 in reliance upon the exemption provided by Section 4(a)(2) thereof.
Item 6[Reserved]
Not Applicable
Item 7Management’s Discussion and Analysis of Financial Condition and Results of Operations
Refer to Pages 10-22, “Management’s Discussion and Analysis” of the 2022 Annual Report To Shareholders filed herewith as Exhibit 13, which section is incorporated herein by reference. For a comparison of results of operations between 2021 and 2020, see “Management’s Discussion and Analysis” in the 2021 Annual Report To Shareholders filed as Exhibit 13 to the Company’s annual report on 10-K for 2021.
Critical Accounting Policy
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the financial services industry. The application of these principles
requires management to make certain estimates, assumptions and judgements that affect the amounts reported in the financial statements and footnotes. These estimates, assumptions and judgements are based on information available as of the date of the financial statements, and as this information changes, the financial statements could reflect different estimates, assumptions, and judgements.
The procedures for assessing the adequacy of the allowance for loan losses reflect our evaluations of credit risk after careful consideration of all information available to management. In developing this assessment, management must rely on estimates and exercise judgement regarding matters where the ultimate outcome is unknown such as economic factors, development affecting companies in specific industries and issues with respect to single borrowers. Depending on changes in circumstances, future assessments of credit risk may yield materially different results, which may require an increase or a decrease in the allowance for loan losses.
The allowance is regularly reviewed by management to determine whether the amount is considered adequate to absorb probable losses. This evaluation includes specific loss estimates on certain individually reviewed loans, statistical losses, estimates for loan pools that are based on historical loss experience, and general loss estimates that are based on the size, quality and concentration characteristics of the various loan portfolios, adverse situations that may affect a borrower’s ability to repay, and current economic and industry conditions. Also considered as part of that judgement is a review of the Bank’s trends in delinquencies and loan losses, and economic factors.
The allowance for loan losses is maintained at a level believed adequate by management to absorb probable losses inherent in the loan portfolio. Management’s evaluation of the adequacy of the allowance is an estimate based on management’s current judgement about the credit quality of the loan portfolio. While the Company strives to reflect all known risk factors in its evaluation, judgement errors may occur.
Item 7AQuantitative and Qualitative Disclosures About Market Risk
Smaller Reporting Companies are not required to provide this disclosure.
Item 8Financial Statements and Supplementary Data
Refer to the Report of the Company’s Independent Registered Public Accounting Firm and the related audited financial statements and notes thereto contained in the 2022 Annual Report To Shareholders filed herewith as Exhibit 13, which items are incorporated herein by reference.
Report of Independent Registered Public Accounting Firm
To the Shareholders, Board of Directors and Audit Committee
United Bancorp, Inc.
Martins Ferry, Ohio
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of United Bancorp, Inc. (the “Company”) as of December 31, 2021, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for the year ended December 31, 2021 and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
We served as the Company’s auditor from 2007 to 2022.
/s/ FORVIS
FORVIS, LLP
(Formerly BKD, LLP)
Cincinnati, Ohio
March 18, 2022
Item 9Changes In and Disagreements with Accountants
The Corporation filed a Current Report on Form 8-K with the SEC on September 30, 2022 to report the dismissal of FORVIS, which filing included as an Exhibit item the letter from FORVIS required by Item 304(a)(3).
On September 29, 2022 the Corporation’s Audit Committee also approved the appointment of S.R. Snodgrass, P.C. (“Snodgrass”) as the Corporation’s new independent registered public accounting firm to perform independent audit services for the fiscal year ending December 31, 2022. During the fiscal years ended December 31, 2021 and 2020 and through September 29, 2022, neither the Corporation, nor anyone acting on its behalf, consulted Snodgrass regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Corporation, and no written report or oral advice was provided to the Corporation by Snodgrass that was an important factor considered by the Corporation in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” (within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as described in Item 304(a)(1)(v) of Regulation S-K).
Item 9AControls and Procedures
The Company, under the supervision, and with the participation, of its management and its outsourced internal audit firm Greenestock Consulting LLC, including the Company’s principal executive and principal financial officers, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2022, pursuant to the requirements of Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2022, in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic SEC filings.
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Under the supervision and with the participation of management, including our principal executive and principal financial officers, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, as required by paragraph (c) of Exchange Act Rule13a-15. Based on the evaluation under Internal Control - Integrated Framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm.
There was no change in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9BOther Information
None.
PART III
Item 10Directors and Executive Officers of the Registrant
Information concerning executive officers of the Company is set forth in Part I, “Executive Officers of Registrant.” Other information responding to this Item 10 is included in the Registrant’s Proxy Statement for the 2023 Annual Meeting of Shareholders and is incorporated by reference under the captions “Proposal 1 - Election of Directors,” “Corporate Governance and Committees of the Board” and “Delinquent Section 16(a) Reports.”
The Company’s Board of Directors has adopted a Code of Ethics that applies to its Principal Executive, Principal Financial, and Principal Accounting Officers. A copy of the Company’s Code of Ethics is posted and can be viewed on the Company’s internet web site at http://www.unitedbancorp.com. In the event the Company amends or waives any provision of its Code of Ethics which applies to its Principal Executive, Principal Financial, or Principal Accounting Officers, and which relates to any element of the code of ethics definition set forth in Item 406(b) of Regulation S-K, the Company shall post a description of the
nature of such amendment or waiver on its internet web site. With respect to a waiver of any relevant provision of the code of ethics, the Company shall also post the name of the person to whom the waiver was granted and the date of the waiver grant.
Item 11Executive Compensation
The information required by this item is incorporated by reference from the section of the Registrant’s Proxy Statement for the 2023 Annual Meeting of Shareholders captioned “Executive Compensation and Other Information”. During 2022, the Compensation Committee authorized the accelerated vesting of 12,500 shares of restricted stock for Mr. Everson and 10,000 shares of restricted stock for each of Messrs. Greenwood and Branstetter. These awards were originally scheduled to vest in 2027.
Item 12Security Ownership of Certain Beneficial Owners and Management and Related Stock Holder Matters
The information contained in the Registrant’s Proxy Statement for the 2023 Annual Meeting of Shareholders under the caption “Ownership of Voting Shares” is incorporated herein by reference.
The following table is a disclosure of securities authorized for issuance under equity compensation plans:
Equity Compensation Plan Information December 31, 2022
Number of securities remaining
Number of securities to be
available for future issuance
issued upon exercise of
Weighted-average exercise
under equity compensation
outstanding options, warrants
price of outstanding options,
plans (excluding securities
and rights
warrants and rights
reflected in column (a))
Equity compensation plans approved by security holders
257,500
(1)
$
-
257,500
Equity compensation plans not approved by security holders
Total
257,500
$
-
257,500
(1) Represents shares of restricted stock awarded under the 2008 and 2018 Stock Incentive Plans.
Item 13Certain Relationships and Related Transactions
The information required by this item is incorporated herein by reference to the sections in the Registrant’s Proxy Statement for the 2023 Annual Meeting of Shareholders captioned “Director Independence and Related Party Transactions “ and ” Corporate Governance and Committees of the Board.”
Item 14Principal Accountant Fees and Services
The information required by this item is incorporated by reference from the section under the caption “Principal Accounting Firm Fees” of the Registrant’s Proxy Statement for the 2023 Annual Meeting of Shareholders.
PART IV
Item 15Exhibits and Financial Statement/Schedules
Financial Statements
The following Consolidated Financial Statements and related Notes to Consolidated Financial Statements, together with the report of the Independent Registered Public Accounting Firm (PCAOB ID 74), appear on pages 25 through 85 of the United Bancorp, Inc. 2022 Annual Report and are incorporated herein by reference.
Consolidated Balance Sheets
December 31, 2022 and 2021
Consolidated Statements of Income
Years Ended December 31, 2022 and 2021
Consolidated Statements of Comprehensive Income
Years Ended December 31, 2022 and 2021
Consolidated Statements of Stockholders’ Equity
Years Ended December 31, 2022 and 2021
Consolidated Statements of Cash Flows
Years Ended December 31, 2022 and 2021
Notes to Consolidated Financial Statements
December 31, 2022 and 2021
Report of Independent Registered Public Accounting Firm (PCAOB ID 74)
Exhibits
Exhibit Number
Exhibit Description
3.1
Amended Articles of Incorporation (1)
3.2
Amended and Restated Code of Regulations (2)
4.1
Description of Registrant’s Common Stock(4)
4.2
Forms of 6.00% Fixed to Floating Rate Subordinated Note due May 15, 2029 (11)
10.1
Randall M. Greenwood Change in Control agreement (3)
10.2
Scott A. Everson Change in Control Agreement (3)
10.3
Matthew F. Branstetter Change in Control Agreement (3)
10.4
United Bancorp, Inc. and Subsidiaries Director Supplemental Life Insurance Plan, covering Messrs. Glessner, Hoopingarner, and Riesbeck. (5)
10.5
United Bancorp, Inc. and Subsidiaries Senior Executive Supplemental Life Insurance Plan, covering, Scott A. Everson, Matthew Branstetter and Randall M. Greenwood. (3)
10.6
Amended and Restated United Bancorp, Inc. and United Bancorp, Inc. Affiliate Banks Directors and Officers Deferred Compensation Plan. (9)
10.7
Amended and Restated Trust Agreement among United Bancorp, Inc. as Depository, Wilmington Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware Trustee, and Administrative Trustees, dated as of November 17, 2005. (6)
10.8
Junior Subordinated Indenture between United Bancorp, Inc. and Wilmington Trust Company, as Trustee, dated as of November 17, 2005. (6)
10.9
Guaranty Agreement between United Bancorp, Inc., as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, dated as of November 17, 2005. (6)
10.10
United Bancorp, Inc. 2008 Stock Incentive Plan (8)
10.11
United Bancorp, Inc. 2018 Stock Incentive Plan (10)
10.12
Form of Subordinated Note Purchase Agreement, dated May 14, 2019, by and among United Bancorp, Inc. and the Purchasers (12)
2022 Annual Report
Subsidiaries of the Registrant
Consent of Independent Registered Public Accounting Firms
31.1
Rule 13a-14(a) Certification - CEO
31.2
Rule 13a-14(a) Certification - CFO
32.1
Section 1350 Certification - CEO
32.2
Section 1350 Certification - CFO
The following materials from United Bancorp, Inc. on Form 10-K for the year ended December 31, 2021, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income and Comprehensive Income; (iii) the Consolidated Statements of Cash Flows and (iv) Notes to Consolidated Financial Statements, tagged as blocks of text.
(1) Incorporated by reference to Appendix B to the registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001.
(2) Incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 18, 2016
(3) Incorporated by reference to the registrant’s 10-K filed with the Securities and Exchange Commission on March 27, 2003.
(4) Incorporated by reference to Exhibit 4 to registrant’s 10-K filed with the Securities and Exchange Commission on March 20, 2020.
(5) Incorporated by reference to the registrant’s 10-K filed with the Securities and Exchange Commission on March 29, 2004.
(6) Incorporated by reference to the registrant’s 10-K filed with the Securities and Exchanges Commission on March 30, 2006.
(7) Incorporated by reference to the registrant’s 8-K filed with the Securities and Exchange Commission on September 24, 2008.
(8) Incorporated by reference to the registrant’s 8-K filed with the Securities and Exchange Commission on April 22, 2008.
(9) Incorporated by reference to Exhibit 10.10 to the registant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 19, 2014
(10) Incorporated by reference to Exhibit 10.1 to the registant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2018
(11) Incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2019.
(12) Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 14, 2019.
United Bancorp Inc.

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ITEM 2. PROPERTIES

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ITEM 3. LEGAL PROCEEDINGS

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ITEM 4. MINE SAFETY DISCLOSURE

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY

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ITEM 6. SELECTED FINANCIAL DATA

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

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ITEM 9A. CONTROLS AND PROCEDURES

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ITEM 9B. OTHER INFORMATION

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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ITEM 11. EXECUTIVE COMPENSATION

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES