Sign in

You're signed outSign in or to get full access.

UB

UNITED BANCORP INC /OH/ (UBCP)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 diluted EPS was $0.32 and net income was $1.872M; EPS declined 8.6% year over year but improved $0.01 sequentially, with “core” EPS flat at $0.30 after adjusting nonrecurring items in both periods .
  • Net interest margin expanded to 3.60% (+14 bps YoY, +9 bps QoQ) on loan repricing and managed deposit pricing; net interest income rose 2.2% YoY and 1.6% QoQ .
  • Total “revenue” (defined as net interest income after provision + noninterest income) was ~$7.432M, up vs both Q4 and Q3, supported by higher fee income and a realized gain on securities (+$143.6K) .
  • Dividend remains a focus: Q1 total payout was $0.3575 (regular $0.1825 plus $0.1750 special), and the regular quarterly dividend was raised to $0.1850 for Q2 2025; forward yield ~5.51% at the referenced price .
  • Strategic investments (Wheeling Banking Center opening planned for late Q3 2025, Unified Mortgage/Treasury Mgmt scaling, digital/AI initiatives, Unified Center buildout) are dilutive near term but expected to drive growth over 12–24 months .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expanded to 3.60% with interest expense to average assets down 3 bps QoQ; management expects continued improvement if the Fed reduces the FFR as markets forecast .
  • Noninterest income increased 47.9% YoY, aided by Unified Mortgage loan sales and a $143.6K realized gain on securities; fee initiatives are scaling .
  • Credit quality remained solid: net loans charged off were ($3K) for the quarter (annualized -0.02% of average loans); allowance coverage to nonaccrual loans at 211% .
  • “We strongly believe that these current undertakings… will provide a pathway to future growth and lead to increasingly higher performance over the course of the next twelve to twenty-four months” — CFO Greenwood .

What Went Wrong

  • EPS and net income declined YoY due to prior-year nonrecurring items and higher noninterest expense from growth investments; total noninterest expense rose 15.5% YoY .
  • Nonaccrual loans increased YoY to $1.94M, largely attributable to one secured commercial relationship; NPA/Assets rose to 0.68% (from 0.51%) .
  • Securities interest income fell 12.0% YoY; deposits dipped modestly (-0.27%), while accumulated OCI loss widened, pressuring equity .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD) Note 1$7,284,444 $7,414,723 $7,431,595
Diluted EPS ($)$0.31 $0.31 $0.32
Net Income ($USD)$1,819,659 $1,849,812 $1,871,872
Net Interest Margin % (FTE)3.50% 3.51% 3.60%
Net Interest Income ($USD)$6,138,894 $6,344,977 $6,246,185
Provision for Credit Losses ($USD)$69,665 $124,499 $96,000
Total Noninterest Income ($USD)$1,215,215 $1,194,245 $1,281,410
Total Noninterest Expense ($USD)$5,529,138 $5,631,264 $5,586,076

Note 1: Revenue is defined here as net interest income after provision + total noninterest income, derived from company press releases .

Balance Sheet and KPIs

MetricQ3 2024Q4 2024Q1 2025
Total Assets ($USD)$825,482,119 $820,835,746 $830,681,164
Gross Loans ($USD)$475,004,333 $490,971,361 $496,866,008
Total Deposits ($USD)$615,818,830 $613,493,640 $624,081,193
Noninterest-bearing Demand ($USD)$144,011,842 $138,808,227 $138,243,804
Interest-bearing Demand ($USD)$180,917,593 $181,881,838 $184,786,353
Savings ($USD)$123,171,427 $125,119,555 $124,244,385
Time Deposits ($USD)$167,717,968 $167,684,020 $176,806,651
ROA (%)0.90% 0.89% 0.91%
ROE (%)11.30% 10.94% 12.31%
Equity/Assets (%)7.93% 8.24% 7.32%
NPA/Assets (%)0.46% 0.50% 0.68%
Allowance/Loans (%)0.84% 0.82% 0.82%
Net Charge-offs to Avg Loans (%)-0.05% 0.04% -0.02%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular Cash Dividend per ShareQ2 2025$0.1825 (Q1 2025 regular dividend) $0.1850 Raised
Special DividendQ1 2025—$0.1750 paid in Q1 N/A
Wheeling Banking CenterLate Q3 2025 (planned opening)Not applicableOpening planned for late Q3 2025 Operational milestone (timing affirmed)
Net Interest Margin Direction2025Monitor; improving trend into Q4 2024 Management optimistic for further NIM improvement if Fed eases Qualitative positive

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Tariffs/Macro UncertaintyFocus on higher-for-longer rates; pressure on NIM; cautious growth Explicit mention of new tariffs introducing added uncertainty; cautious optimism Heightened macro uncertainty
NIM and Funding CostsNIM fell to 3.50% in Q3; stabilized/improved to 3.51% in Q4; selective deposit pricing; FHLB advance helpful NIM rose to 3.60%; interest expense to avg assets down QoQ; further improvement expected if FFR declines Improving
Loan GrowthLow/mid-single digit YoY; QoQ acceleration in Q4 (+$16M); commercial focus Gross loans +$16.6M YoY; continued repricing; commercial ~80% of loans Improving
Credit QualityNPA/Assets ~0.46–0.50%; low net charge-offs; increased provision in 2024 NPA/Assets 0.68%; one well-secured commercial nonaccrual; net charge-offs near zero; provision $96K Slightly weaker NPA but stable loss metrics
Fee InitiativesUnified Mortgage and Treasury Mgmt scaling; stronger loan sale gains Higher noninterest income; loan sale gains and securities gains; continued scaling Positive
Technology & AIDigital transformation underway AI implementation for customer inquiries and sales routing; Unified Center buildout Advancing
New MarketsWheeling Banking Center under construction; opening targeted Q3 2025 Timing affirmed; early loan production tied to new team On track

Management Commentary

  • “Netting these one-time, nonrecurring items out of our reported diluted earnings per share for both years results in ‘core’ diluted earnings per share for each of these periods of $0.30” — CFO Randall M. Greenwood .
  • “Year-over-year… net interest income… increased by $131,000, or 2.2%, and our net interest margin improved by fourteen (14) basis points to 3.60%” — CFO Greenwood .
  • “We have successfully maintained credit-related strength and stability… total nonaccrual loans and loans past due 30 plus days were $2.8 million… loss given default is extremely low” — CFO Greenwood .
  • “We are also in the process of implementing artificial intelligence (AI)… guide [customers] to the best financial solutions… [Unified Center] will centralize service and have a sales-oriented function” — CEO Scott A. Everson .
  • “We can begin to focus on attracting more deposits… and working toward achieving our goal of growing our total assets to a level of $1.0 billion or greater!” — CEO Scott A. Everson .

Q&A Highlights

  • No Q1 2025 earnings call transcript was available in our document set; therefore, Q&A themes and any guidance clarifications cannot be assessed from a call transcript [ListDocuments returned none for earnings-call-transcript in Q2 CY2025 window].

Estimates Context

  • EPS consensus: Unavailable via S&P Global for Q1 2025; no estimates returned. Values retrieved from S&P Global.*
  • Revenue consensus: Unavailable via S&P Global for Q1 2025; only actual was present. Values retrieved from S&P Global.*
  • Actual revenue composition (company-defined as net interest income after provision + noninterest income) was $7.432M, consistent with press release components ($6.150M + $1.281M) .

Key Takeaways for Investors

  • Sequential improvement in EPS and net interest margin suggests earnings inflection amid easing monetary policy; further Fed rate cuts would be supportive .
  • Fee income momentum (mortgage sales, treasury services) and realized securities gains diversified revenue, offsetting pressure in securities interest income .
  • Credit quality remains resilient despite higher nonaccruals tied to a single, well-secured commercial relationship; net charge-offs near zero and allowance strong at 211% of nonaccruals .
  • Deposit mix is shifting toward time deposits; selective pricing helped liquidity and controlled interest expense; watch for margin benefits if funding costs normalize .
  • Strategic investments (Wheeling Banking Center, Unified Center, AI/digital initiatives) increase near-term OpEx but position UBCP for growth over 12–24 months; monitor execution milestones and incremental revenue contribution .
  • Dividend policy remains shareholder-friendly with regular dividend raised to $0.1850 for Q2 2025 and robust special dividend in Q1; yield remains attractive .
  • With consensus estimates unavailable, near-term trading likely anchors on margin trajectory, fee momentum, credit stability, and dividend cadence rather than formal “beat/miss” dynamics .