Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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United Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Driving the increase in our Company's total assets as of September 30, 2026 was the growth that we experienced in our total deposits. Year-over-year, total deposits grew by $77.3 million, or 12.0%, to a level of $722.5 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 $55.8 million, or 12.2%, to a level of $511.9 million (which is 70.9% of total deposits). In addition, higher-cost time deposits increased by $21.5 million, or 11.4%, to a level of $210.6 million (which is 29.1% of total deposits). Remarkably, even with this increase in the total deposits of our Company, total interest expense as of September 30, 2026 decreased by ($605,000), or (5.4%), and our interest expense to average assets decreased by seventeen basis points (17bps) on a year-over-year basis to a level of 1.63%. This decrease in total interest expense can be attributed to our Company's aforementioned attraction of lower-cost deposit along with the continued downward repricing of our core deposits and the maturity of a $20.0 million Federal Home Loan Bank (FHLB) Advance in the first quarter of this year on which we were paying a rate of 4.39%.

With the year-over-year increase in total interest income and decrease in total interest expense, UBCP was able to continue the trend of having increasing net interest income and an expanding net interest margin. For the first nine months of 2026, net interest income increased by $942,000, or 4.8%, and the net interest margin increased by eighteen basis points (18bps) to a level of 3.84%, both year-over-year. We anticipate the increasing trends of our Company's net interest income and net interest margin to continue over the remainder of 2026; especially, considering that our Company is currently seeing stronger demand for loan products and we anticipate redeploying funds currently parked in lower-yielding overnight investments into higher-yielding loan products in the upcoming quarter.

Relating to the credit-quality metrics for our Company, we saw an improvement relating thereto this quarter. At quarter-end, September 30, 2026, our Company's nonaccrual loans and loans past due thirty-plus days totaled $2.9 million (or, 0.57% of gross loans), which was a decrease of $266,000 year-over-year. More noteworthy, on a linked-quarter basis, our level of nonaccrual loans and loans past due thirty-plus days decreased significantly due to the aforementioned single-relationship commercial credit that was charged off during the most recent quarter. Sequentially, this metric on an inter-quarter basis declined by $4.0 million, or 58.0%, from a level of $6.9 million. In addition, our delinquency trends remain near historic lows with loans past due thirty plus days at a level of $736,000 or 0.15% of gross loans. This compares very favorably with our peer. Accordingly, we believe that our overall credit quality is sound at present. We have dealt with an issue that related to a single borrowing relationship, which is not indicative of the overall quality of our loan portfolio. Our Company remains very well capitalized by regulatory standards with regulatory capital (stockholders' equity plus accumulated other comprehensive loss) of $76.0 million, or 8.7% of average assets, which is an increase of $931,000 million, or 1.2%, year-over-year.

With our 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 "core" financial results that we have achieved in the current year as of September 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 previously mentioned, we opened our newest banking center… a regional hub… in the appealing market of Wheeling, West Virginia, on December 9, 2025. This office has been very well received by this vibrant market and has exceeded our performance expectations during the first nine months of operation. A lot of the growth in our depository base can be attributed to this new 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 focus on further scaling this function with the addition of mortgage loan originators--- and, considering the positive operating leverage that presently exists within this developing 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 nine months 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 September 30, 2026.

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United Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

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… 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… enabling customers, both business and consumer, to open all deposit accounts and most services 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 Unified Care Center that will also be housed at this facility. The Unified 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 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 Unified 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. Being a monumental undertaking that will be transformative for our Company, we anticipate that we will begin rolling-out these new technology and support functions by the end of the first quarter of 2027. Ultimately, as this function fully develops, we believe that the Unified Care Center has the potential to become 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 third quarter of this year, UBCP paid a regular cash dividend at a level of $0.1975, an increase of $0.01, or 5.3%, over the regular cash dividend paid in the third quarter of the previous year. Year-to-date, our Company paid total cash dividends of $0.7600, which includes a special cash dividend of $0.1750 paid in the first quarter. At the third quarter dividend payout level, the forward yield produced by our regular cash dividend is 5.3% and, inclusive of the special dividend, the forward yield is 6.5%, considering our quarter-ending fair market value as of September 30, 2026 of $14.79. On a year-over-year basis, the fair market value of our Company's stock increased by $0.81 or 5.8%.

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 a solid return on these investments that we have made and are currently implementing to improve our operations and delivery. Even though such expenditures do have a dilutive impact on the earnings that we produce in the short-term, we are starting to see a payoff on these investments as our Pre-Provision Net Revenue has increased somewhat significantly on a year-over-year basis. Even though we had a one-off credit event that impacted earnings for the most recently ended quarter, we firmly believe this event was an anomaly and are truly encouraged by our Company's increasing "core" earnings and balance sheet growth in the first nine months of 2026. We anticipate these positive "core" trends will continue for the remainder of the current year. 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.

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United Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Supplemental Reporting off Non-GAAP measures

Management believes providing certain "non-GAAP" financial information will assist readers in their understanding of the effect on recent financial results from non-recurring charges related to the reserve for credit losses and growth of the Company's balance sheet.

Pre Provision Net Revenue ("PPNR")

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Forward-Looking Statements

When used in this document, the words such as "may," "will," "anticipate," "believe," "expect," "intend," "plan," "estimate," "project," "could," "should," or similar expressions are intended to identify "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including, among others, changes in economic or market conditions in the Company's geographic markets; changes in interest rates and funding costs; changes in loan demand or deposit flows; credit quality trends; competition from financial and non-financial institutions; regulatory or legislative actions and supervisory matters; cybersecurity events or operational disruptions; and other risks described from time to time in the Company's filings with the Securities and Exchange Commission, that could affect the Company's financial performance and cause actual results to differ materially from historical earnings and those presently anticipated or projected with respect to future periods. These risks and uncertainties should be considered in evaluating forward looking statements, and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including other factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Investors are cautioned not to place undue reliance on such forward-looking statements. The Company is not aware of any trends, events or uncertainties that will have or are reasonably likely to have a material effect on its financial condition, results of operations, liquidity or capital resources except as discussed herein. The Company is not aware of any current recommendation by regulatory authorities that would have such effect if implemented except as discussed herein.

The Company does not undertake, and specifically disclaims any obligation, to publicly revise any forward-looking statements to reflect events or circumstances after the date such statements were made or to reflect the occurrence of anticipated or unanticipated events.

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United Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Critical Accounting Policies

The Company's consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. Management makes certain judgments that affect the amounts reported in the financial statements and footnotes. These estimates, assumptions and judgments 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 judgments.

See Note 1, "Summary of Significant Accounting Policies" Management considers the measurement of the allowance for credit losses on loans to be a critical accounting policy.

This discussion of the Company's critical accounting policies should be read in conjunction with the Company's consolidated financial statements and the accompanying notes presented elsewhere herein, as well as other relevant portions of Management's Discussion and Analysis of Financial Condition and Results of Operations.

Analysis of Financial Condition

Earning Assets - Loans

The Company's focus as a community bank is to meet the credit needs of the markets it serves. At September 30, 2026, gross loans were $503.9 million, compared to $491.6 million at December 31, 2025, an increase of $7.8 million after offsetting repayments for the period. The overall increase in the loan portfolio was comprised of a $17.4 million increase in commercial and commercial real estate loans and a $4.2 million decrease in residential real estate lending and a $921,000 decrease in consumer loans since December 31, 2025.

Commercial and commercial real estate loans comprised 81.9% of total loans at September 30, 2026, compared to 80.4% at December 31, 2025. Commercial and commercial real estate loans have increased $17.4 million, or approximately 4.4% 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 1.2% of total loans at September 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 $921,000, or 13.3%, since December 31, 2025.

Residential real estate loans were 16.9% of total loans at September 30, 2026 and 18.2% at December 31, 2025, representing a decrease of $4.2 million or 4.7% since December 31, 2025.

The allowance for credit losses totaled $3.8 million at September 30, 2026, which represented 0.75% 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 charge-offs (exclusive of overdrafts net charge-offs of $90,000) for the nine months ended September 30, 2026 were approximately $3.0 million, of which $2,952,000 related to one commercial loan. The Company was able to off-set the impact of this charge-off with a reduction of the qualitative factors associated with the improved level of projected and current unemployment. Net loans charged off (exclusive of overdrafts net charge-offs $74,000) was $137,000 for the nine months ended September 30, 2025.

Earning Assets - Securities

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 September 30, 2026 decreased approximately $10.6 million from December 31, 2025 totals.

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United Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Sources of Funds - Deposits

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 September 30, 2026, total core deposits (interest and non interest bearing accounts and savings) increased approximately $52.2 million, or 11.4% from December 31, 2025 totals. The Company's savings accounts increased $5.9 million or 4.8% from December 31, 2025 totals. The Company's interest-bearing and non-interest bearing demand deposits increased $46.3 million while certificates of deposit under $250,000 increased by $22.8 million.

The Company has a strong deposit base from public agencies, including local school districts, city and township municipalities, public works facilities and others that may tend to be more seasonal in nature resulting from the receipt and disbursement of state and federal grants. These entities have maintained fairly static balances with the Company due to various funding and disbursement timeframes.

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 September 30, 2026, certificates of deposit greater than $250,000 increased $6.1 million or 14.6%, from December 31, 2025 totals.

Sources of Funds - Securities Sold under Agreements to Repurchase and Other Borrowings

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 increased approximately $6.4 million from December 31, 2025 totals. At September 30, 2026, the Company has $55 million of fixed rate advances that mature over the next 6 months to 1.5 years. Refer to footnote 10 for further information.

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

Net Income

The reported diluted earnings per share was $0.25 for the quarter ended September 30, 2026 compared to $0.34 for the quarter ended September 30, 2025, a decrease of $0.09 per share. This decrease was mainly driven by the increase in the provision for credit losses of $2.2 million quarter over quarter and was one commercial loan relationship that was charged-off during the three months ended September 30, 2026.

Net Interest Income

Net interest income increased $269,000 or 4.0% for the three months ended September 30, 2026 compared to the same period in 2025. This increase was mainly due to increase in the yield in our securities and lending portfolios and overall growth in our earning asset balances and a decrease in the cost of deposits and borrowings.

Provision for Credit Losses

The Company had a provision for credit losses of $2.4 million for the three months ended September 30, 2026 as compared to a provision for credit losses of $186,000 for same period in 2025. The increase quarter over quarter was due to one commercial loan relationship that was charged -off and recorded into other real estate owned as of September 30, 2026.

Noninterest Income

Noninterest income of the Company increased $955,000 quarter-over-quarter. This increase was Maily dure to an increase in earnings on bank-owned life insurance of $229,000 resulting from the purchase of $10.7 million of bank-owend life insruaance during the fourth quarter of 2025 and $6.0 million during the first quarter of 2026 and a realized gain on the sale of available-for-sale securities of $560,000 for the three months ended September 30, 2026 over the same period in 2025.

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United Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Noninterest Expense

The Company saw its noninterest expense decrease by $167,000 or 2.8% year-over-year. The decrease is mainly due to lower projected team member incentives for 2026.

Federal Income Taxes

The provision for federal income benefits was $334,000 for the three months ended September 30, 2026. The Company had an income tax benefit of $20,000 for the three months ended September 30, 2025.

Results of Operations for the Nine Months Ended September 30, 2026 and 2025

Net Income

The reported diluted earnings per share was $0.94 for the nine months ended September 30, 2026 compared to $0.99 for the nine months ended September 30, 2025 a decrease 5.1%.

Net Interest Income

Net interest income increased $942,000 or 4.8% for the nine months ended September 30, 2026 compared to the same period in 2025. This increase was mainly due to our variable rate loans repricing upward and an increase in earning assets period over period.

Provision for Credit Losses

The Company had a provision for credit losses of $2,577,000 for the nine months ended September 30, 2026 as compared to a provision for credit losses of $488,000 for same period in 2025. As previously discussed, the increase in the provision for credit losses was due to the charge-off on one commercial loan.

Noninterest Income

Noninterest income of the Company increased $1,326,000 year-over-year. This increase was in part due to an increase in bank-owned life insurance income of $686,000 year over year resulting from the purchase of $10.7 million of bank-owend life insruaance during the fourth quarter of 2025 and $6.0 million during the first quarter of 2026. The Company also had a gain on the sale of available-for-sale securities of $560,000 for the nine months ended September 30, 2026 as compared to $144,000 for the nine months ended September 30, 2025. In addition, the Company's gain on the sale of loans increased $230,000 year over year.

Noninterest Expense

The Company saw its noninterest expense increased by $993,000 or 5.7% year-over-year. The increase is due to additional staffing related to the December 2025 opening of our Wheeling Banking Center and normal merit increases and general inflation. This increase is offset by lower projected team member incentives for 2026.

Federal Income Taxes

The provision for federal income taxes benefits was 528,000 for the nine months ended September 30, 2026. The Company had an income tax benefit of $24,000 for the nine months ended September 30, 2025.

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United Bancorp, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Capital Resources

Internal capital growth, through the retention of earnings, is the primary means of maintaining capital adequacy for the Company. Stockholders' equity totaled $52.1 million at September 30, 2026, compared to $70.5 million at December 31, 2025, a $18.4 million decrease solely related to the accumulated other comprehensive loss in the Company's available-for-sale securities. With the increase in longer term interest rates this impacted the fair market value of the Company's securities. Total stockholders' equity in relation to total assets was 5.80% at September 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.

The Company has offered for many years a Dividend Reinvestment Plan ("The Plan") for shareholders under which the Company's common stock will be purchased by the Plan for participants with automatically reinvested dividends. The Plan does not represent a change in the Company's dividend policy or a guarantee of future dividends.

The Company is subject to the regulatory requirements of The Federal Reserve System as a bank holding company. The Bank is subject to regulations of the FDIC and the State of Ohio, Division of Financial Institutions. The most important of these various regulations address capital adequacy.

The Bank continues to be well-capitalized in accordance with Federal regulatory capital requirements as the capital ratios below show:

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Liquidity

Management's objective in managing liquidity is maintaining the ability to continue meeting the cash flow needs of its customers, such as borrowings or deposit withdrawals, as well as its own financial commitments. The principal sources of liquidity are net income, loan payments, maturing securities and sales of securities available for sale, federal funds sold and cash and deposits with banks. Along with its liquid assets, the Company has additional sources of liquidity available to ensure that adequate funds are available as needed. These include, but are not limited to, the purchase of federal funds, the ability to borrow funds under line of credit agreements with correspondent banks, a borrowing agreement with the Federal Home Loan Bank of Cincinnati and the adjustment of interest rates to obtain depositors. Management feels that it has the capital adequacy and profitability to meet the current and projected liquidity needs of its customers.

Inflation and Economic Environment

Inflation can directly impact the Company's performance by potentially reducing the spending power of its borrowers. Higher costs continue to present a risk to the economy. The Company continues to closely monitor and analyze the higher risk segments within the loan portfolio, tracking past due accounts. Based on the Company's capital levels, prudent underwriting policies, loan concentration diversification and our geographic footprint, senior management is cautiously optimistic that the Company is positioned to continue managing the impact of the varied set of risks and uncertainties currently impacting the economy and remain adequately capitalized. However, the Company may be required to make additional credit loss provisions as warranted by the extremely fluid economic condition.

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