May 25, 2022

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Form 10-Q UNITED BANCORP INC /OH/ For: Mar 31


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

x QUARTERLY REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2021  

 

OR

 

¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT

 

For the transition period from ____________ to ____________

 

Commission File Number: 0-16540  

 

UNITED BANCORP, INC.

(Exact name of registrant
as specified in its charter)

  

Ohio   34-1405357
(State or other jurisdiction of   (IRS Employer Identification No.)
incorporation or organization)    

 

201 South Fourth Street, Martins Ferry, Ohio 43935-0010
(Address of principal executive offices)

 

(740) 633-0445
(Registrant’s telephone number, including area code)

 

N/A
(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section
12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which
registered
Common Stock, Par Value $1.00   UBCP   NASDQ Capital Market

  

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days.

 

Yes x        No ¨

 

Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).

 

Yes x        No ¨

 

Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.

  

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x Smaller Reporting Company x Emerging growth company  ¨

  

If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

  

Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨   No
x

 

Indicate the number of shares outstanding of the
issuer’s classes of common stock as of the latest practicable date: As of May 7, 2021, 5,966,758 shares of the Company’s common
stock, $1.00 par value, were issued and outstanding.

 

 

  

 

 

ITEM 1. Financial Statements

 

United Bancorp,
Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

    March 31,     December 31,  
    2021     2020  
    (Unaudited)        
Assets                
Cash and due from banks   $ 10,251     $ 11,637  
Interest-bearing demand deposits     86,800       39,955  
Cash and cash equivalents     97,051       51,592  
Available-for-sale securities     146,313       158,067  
Loans, net of allowance for loan losses of $4,807 and $5,113 at March 31, 2021 and December 31, 2020, respectively     445,227       438,378  
Premises and equipment     13,665       13,743  
Federal Home Loan Bank stock     4,097       4,177  
Foreclosed assets held for sale, net     467       721  
Core deposit and other intangible assets     673       710  
Goodwill     682       682  
Accrued interest receivable     2,581       2,901  
Bank-owned life insurance     18,226       18,109  
Other assets     4,274       4,322  
Total assets   $ 733,256     $ 693,402  
Liabilities  and Stockholders’ Equity                
Liabilities                
Deposits                
Demand   $ 401,963     $ 376,287  
Savings     131,677       122,549  
Time     74,382       80,699  
Total deposits     608,022       579,535  
Securities sold under repurchase agreements     27,180       12,705  
Subordinated debentures     23,619       23,604  
Deferred federal income tax     1,629       2,185  
Interest payable and other liabilities     6,084       7,045  
Total liabilities     666,534       625,074  
Stockholders’ Equity                
Preferred stock, no par value, authorized 2,000,000 shares; no shares issued            
Common stock, $1 par value; authorized 10,000,000 shares; issued 6,046,351 shares at March 31, 2021, and 6,046,351 shares at December 31, 2020;  outstanding – 5,808,055 and 5,791,853 shares at March 31, 2021 and December 31, 2020, respectively     6,046       6,046  
Additional paid-in capital     23,174       23,166  
Retained earnings     32,958       32,497  
Stock held by deferred compensation plan; 158,703 and 174,905 shares at March 31, 2021 and December 31, 2020     (1,580 )     (1,675 )
Accumulated other comprehensive income     7,113       9,283  
Treasury stock, at cost 79,593 and 79,593 shares at March 31, 2021 and December 31, 2020, respectively     (989 )     (989 )
Total stockholders’ equity     66,722       68,328  
Total liabilities and stockholders’ equity   $ 733,256     $ 693,402  

 

See Notes to Condensed Consolidated Financial Statements

  

 

United
Bancorp, Inc.

Condensed Consolidated Statements of Income

Three Months Ended March 31, 2021 and 2020

(In thousands, except per share data)

(Unaudited)

 

    2021     2020  
Interest and Dividend Income                
Loans, including fees   $ 4,913     $ 5,842  
Securities                
Taxable     29       223  
Non-taxable     1,108       1,197  
Federal funds sold     11       29  
Dividends on Federal Home Loan Bank and other stock     27       28  
Total interest and dividend income     6,088       7,319  
Interest Expense                
Deposits     406       1,121  
Borrowings     369       564  
Total interest expense     775       1,685  
Net Interest Income     5,313       5,634  
Provision (Credit) for Loan Losses     (205 )     563  
Net Interest Income After Provision for Loan Losses     5,518       5,071  
Noninterest Income                
Service charges on deposit accounts     592       659  
Realized gains on sales of securities           69  
Realized gains on sales of loans     75       6  
Earnings on bank-owned life insurance     182       195  
Other income     77       115  
Total noninterest income     926       1,044  
Noninterest Expense                
Salaries and employee benefits     2,304       2,346  
Occupancy and equipment     600       606  
Professional services     319       277  
FDIC insurance     50       44  
Insurance     129       118  
Franchise and other taxes     134       122  
Advertising     113       75  
Stationery and office supplies     23       26  
Amortization of intangibles     37       37  
Other expenses     740       759  
Total noninterest expense     4,449       4,410  
Income Before Federal Income Taxes     1,995       1,705  
Provision for Federal Income Taxes     87       126  
Net Income   $ 1,908     $ 1,579  
Basic Earnings Per Share   $ 0.33     $ 0.28  
Diluted Earnings Per Share   $ 0.33     $ 0.28  
Dividends Per Share (including special dividend of $0.10 in March 2021)   $ 0.2425     $ 0.1425  

 

See Notes to Condensed Consolidated Financial Statements

 

 

United
Bancorp, Inc.

Condensed Consolidated Statements of Comprehensive
(Loss) Income

Three Months Ended March 31, 2021 and 2020

(In thousands, except per share data)

(Unaudited)

 

    2021     2020  
Net Income   $ 1,908     $ 1,579  
Other comprehensive income (loss), net of tax                
Reclassification adjustment for realized gains on available-for-sale securities included in net income, net of taxes $14 for the three months ended March 31, 2020           (55 )
Unrealized holding (loss) gains on available-for-sale securities during the period, net of (benefits) taxes of $(577) and $707 for each respective period     (2,170 )     2,716  
                 
Comprehensive (Loss) income   $ (262 )   $ 4,240  

 

See Notes to Condensed Consolidated Financial Statements

 

 

 

United Bancorp, Inc.

Consolidated Statements of Stockholders’
Equity

Three Months Ended March 31, 2021 and 2020

(In thousands except per share data)

(Unaudited)

 

                Treasury     Shares           Accumulated        
          Additional     Stock and     Acquired           Other        
    Common     Paid-in     Deferred     By     Retained     Comprehensive        
    Stock     Capital     Compensation     ESOP     Earnings     Income
(Loss)
    Total  
Balance January 1, 2020     5,959       22,871       (2,121 )     (228 )     27,905       5,536       59,922  
Net income     ––       ––       ––       ––       1,579       ––       1,579  
Other comprehensive income     ––       ––       ––       ––       ––       2,661       2,661  
Cash dividends – $0.1425 per share     ––       ––       ––       ––       (840 )     ––       (840 )
Restricted stock activity     10       (10 )           ––       ––       ––       ––  
Shares purchase for deferred compensation plan     ––       (137 )     137       ––       ––       ––       ––  
Repurchase of common stock     ––             (526 )     ––       ––       ––       (526 )
Expense related to share-based compensation plans     ––       73               ––       ––       ––       73  
Amortization of ESOP     ––             ––       79       ––       ––       79  
Balance, March 31, 2020   $ 5,969       22,797       (2,510 )     (149 )     28,644       8,197       62,948  
 Balance January 1, 2021     6,046       23,166       (2,664 )           32,497       9,283       68,328  
Net income     ––       ––       ––       ––       1,908       ––       1,908  
Other comprehensive loss     ––       ––       ––       ––       ––       (2,170 )     (2,170 )
Cash dividends – $0.2425 per share     ––       ––       ––       ––       (1,447 )     ––       (1,447 )
Shares purchased for deferred compensation plan     ––       (95 )     95       ––       ––       ––       ––  
Expense related to share-based compensation
plans
    ––       103       ––             ––       ––       103  
Balance, March 31, 2021   $ 6,046     $ 23,174     $ (2,569 )   $     $ 32,958     $ 7,113     $ 66,722  

 

See Notes to Condensed Consolidated Financial Statements

 

 

United Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31, 2021 and 2020

(In thousands)

(Unaudited)

 

    2021     2020  
Operating Activities                
Net income   $ 1,908     $ 1,579  
Items not requiring (providing) cash                
Depreciation and amortization     287       289  
Amortization of intangible asset     37       37  
Premium amortization on securities     94       326  
Provision (Credit) for loan losses     (205 )     563  
Gain on sale foreclosed assets held for sale     (72 )      
Gain on sale of loans     (75 )     (6 )
Expense related to share based compensation programs     103       74  
Increase in value of bank-owned life insurance     (117 )     (135 )
Gain on sale of available-for-sale securities           (69 )
Originations of loans held for sale     (4,112 )     (226 )
Proceeds from sale of loans held for sale     4,187       232  
Expense related to share-based compensation plans and ESOP           78  
Amortization of debt instrument costs     15       15  
Net change in accrued interest receivable and other assets     293       (313 )
Net change in accrued expenses and other liabilities     (941 )     (493 )
                 
Net cash provided by operating activities     1,402       1,951  
                 
Investing Activities                
Purchase of available-for-sale securities           (19,647 )
Proceeds from calls/redemptions of available-for-sale securities     8,914       6,073  
Proceeds from sales of available-for-sale securities           8,070  
Net change in loans     (6,629 )     (6,868 )
(Purchase) redemption of FHLB Stock     80       (440 )
Proceeds from sales of foreclosed assets held for sale     385        
Purchases of premises and equipment     (208 )     (1,037 )
                 
Net cash provided by (used in) investing activities     2,542       (13,849 )
                 
Financing Activities                
Net change in deposits   $ 28,487     $ 7,449  
Net change in securities sold under repurchase agreements     14,475       7,672  
Net change in Federal Home Loan Bank advances           11,200  
Repurchase of common stock           (526 )
Cash dividends paid     (1,447 )     (840 )
                 
Net cash provided by financing activities     41,515       24,955  
                 
Increase in Cash and Cash Equivalents     45,459       13,057  
                 
Cash and Cash Equivalents, Beginning of Period     51,592       14,985  
                 
Cash and Cash Equivalents, End of Period   $ 97,051     $ 28,042  
                 
Supplemental Cash Flows Information                
Interest paid on deposits and borrowings   $ 450     $ 1,706  

 

See Notes to Condensed Consolidated Financial Statements 

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 1: Summary of Significant Accounting Policies

 

These interim financial statements
are prepared without audit and reflect all adjustments which, in the opinion of management, are necessary to present fairly the financial
position of United Bancorp, Inc. (“Company”) at March 31, 2021, and its results of operations and cash flows for the interim
periods presented. All such adjustments are normal and recurring in nature. The accompanying condensed consolidated financial statements
have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not purport to contain all the necessary financial
disclosures required by accounting principles generally accepted in the United States of America that might otherwise be necessary in
the circumstances and should be read in conjunction with the Company’s consolidated financial statements and related notes for the
year ended December 31, 2020 included in its Annual Report on Form 10-K. Reference is made to the accounting policies of the Company described
in the Notes to the Consolidated Financial Statements contained in its Annual Report on Form 10-K. The results of operations for the three
months ended March 31, 2021, are not necessarily indicative of the results to be expected for the full year. The condensed consolidated
balance sheet of the Company as of December 31, 2020 has been derived from the audited consolidated balance sheet of the Company as of
that date.

 

Principles of Consolidation

 

The consolidated financial statements
include the accounts of United Bancorp, Inc. (“United” or “the Company”) and its wholly-owned subsidiary, Unified
Bank of Martins Ferry, Ohio (“the Bank”). All intercompany transactions and balances have been eliminated in consolidation.

 

Nature of Operations

 

The Company’s revenues,
operating income and assets are almost exclusively derived from banking. Accordingly, all of the Company’s banking operations
are considered by management to be aggregated in one reportable operating segment. Customers are mainly located in Athens, Belmont,
Carroll, Fairfield, Harrison, Jefferson and Tuscarawas Counties in Ohio and Marshall and Ohio Counties in West Virginia and the
surrounding localities in northeastern, east-central and southeastern Ohio and include a wide range of individuals, businesses and
other organizations. Unified Bank conducts its business through its main office in Martins Ferry, Ohio and branches in Amesville,
Bridgeport, Colerain, Dellroy, Dillonvale, Dover, Glouster, Jewett, Lancaster Downtown, Lancaster East, Nelsonville, New
Philadelphia, Powhatan Point, St. Clairsville East, St. Clairsville West, Sherrodsville, Strasburg, Tiltonsville, Ohio and
Moundsville West Virginia.

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Company’s primary deposit
products are checking, savings and term certificate accounts and its primary lending products are residential mortgage, commercial and
installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and
real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by
both residential and commercial real estate. Net interest income is affected by the relative amount of interest-earning assets and interest-bearing
liabilities and the interest received or paid on these balances. The level of interest rates paid or received by the Company can be significantly
influenced by a number of environmental factors, such as governmental monetary and fiscal policies, that are outside of management’s
control.

 

Revenue Recognition

 

Accounting Standards Codification (“ASC”)
606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature,
amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.
The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that
reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance
obligations are satisfied. 

 

The majority of our revenue-generating
transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans, investment securities,
as well as revenue related to our mortgage banking activities, as these activities are subject to other GAAP discussed elsewhere within
our disclosures.

 

Descriptions of our revenue-generating
activities that are within the scope of ASC 606, which are presented in our income statements as components of non-interest income are
as follows:

 

Service charges on deposit accounts
– these represent general service fees for monthly account maintenance and activity- or transaction-based fees and consist of transaction-based
revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized
when our performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been
completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations
are satisfied.

 

 

Use of Estimates

 

To prepare financial statements in
conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based
on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures
provided and future results could differ. The allowance for loan losses and fair values of financial instruments are particularly subject
to change.

 

Loans

 

Loans that management has the intent
and ability to hold for the foreseeable future or until maturity or payoffs are reported at their outstanding principal balances adjusted
for unearned income, charge-offs, the allowance for loan losses, any unamortized deferred fees or costs on originated loans and unamortized
premiums or discounts on purchased loans.

 

For loans amortized at cost, interest
income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums
and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.

 

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

For all loan classes, the accrual of
interest is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past
due status is based on contractual terms of the loan. For all loan classes, the entire balance of the loan is considered past due if the
minimum payment contractually required to be paid is not received by the contractual due date. For all loan classes, loans are placed
on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

 

Management’s general practice
is to proactively charge down loans individually evaluated for impairment to the fair value of the underlying collateral. Consistent with
regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible.
The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

 

For all loan portfolio segments except
residential and consumer loans, the Company promptly charges-off loans, or portions thereof, when available information confirms that
specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition
of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability
to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge-off is
recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

 

The Company charges-off residential
and consumer loans when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable
regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less
costs to sell when the loan is 120 days past due, charge-off of unsecured open-end loans when the loan is 120 days past due, and charge
down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for
which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will
occur regardless of delinquency status, need not be charged off.

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

For all classes, all interest accrued
but not collected for loans that are placed on nonaccrual or charged off are reversed against interest income. The interest on these loans
is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status
when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Nonaccrual
loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no
longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance
of not less than six months before returning a nonaccrual loan to accrual status.

 

When cash payments are received on
impaired loans in each loan class, the Company records the payment as interest income unless collection of the remaining recorded principal
amount is doubtful, at which time payments are used to reduce the principal balance of the loan. Troubled debt restructured loans recognize
interest income on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms, no principal reduction
has been granted and the loan has demonstrated the ability to perform in accordance with the renegotiated terms for a period of at least
six months.

 

Allowance for Loan Losses

 

The allowance for loan losses is established
as losses are estimated to have occurred through a provision for loan losses charged to income. Loan losses are charged against the allowance
when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

 

The allowance for loan losses is evaluated
on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical
experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated
value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates
that are susceptible to significant revision as more information becomes available.

 

The allowance consists of allocated
and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified
as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired
loan is lower than the carrying value of that loan. The general component covers non-impaired loans and is based on historical charge-off
experience by segment. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced
by the Company over the prior five years. Management believes the five year historical loss experience methodology
is appropriate in the current economic environment.
Other adjustments (qualitative/environmental considerations) for each segment
may be added to the allowance for each loan segment after an assessment of internal or external influences on credit quality that are
not fully reflected in the historical loss or risk rating data.

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

A loan is considered impaired when,
based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal
or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment
include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due based on
the loan’s current payment status and the borrower’s financial condition including available sources of cash flows. Loans
that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.

 

Management determines the significance
of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan
and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount
of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for non-homogenous type
loans such as commercial, non-owner residential and construction loans by either the present value of expected future cash flows discounted
at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan
is collateral dependent. For impaired loans where the Company utilizes the discounted cash flows to determine the level of impairment,
the Company includes the entire change in the present value of cash flows as bad debt expense.

 

The fair values of collateral dependent
impaired loans are based on independent appraisals of the collateral. In general, the Company acquires an updated appraisal upon identification
of impairment and annually thereafter for commercial, commercial real estate and multi-family loans. If the most recent appraisal is over
a year old, and a new appraisal is not performed, due to lack of comparable values or other reasons, the existing appraisal is utilized
and discounted generally 10{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} -35{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} based on the age of the appraisal, condition of the subject property, and overall economic conditions.
After determining the collateral value as described, the fair value is calculated based on the determined collateral
value less selling expenses. The potential for outdated appraisal values is considered in our determination of the allowance for loan
losses through our analysis of various trends and conditions including the local economy, trends in charge-offs and delinquencies, etc.
and the related qualitative adjustments assigned by the Company.

 

Segments of loans with similar risk
characteristics are collectively evaluated for impairment based on the segment’s historical loss experience adjusted for changes
in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, the Company does not separately identify
individual consumer and residential loans for impairment measurements, unless such loans are the subject of a restructuring agreement
due to financial difficulties of the borrower.

 

In the course of working with borrowers,
the Company may choose to restructure the contractual terms of certain loans. In this scenario, the Company attempts to work-out an alternative
payment schedule with the borrower in order to optimize collectability of the loan. Any loans that are modified are reviewed by the Company
to identify if a troubled debt restructuring (“TDR”) has occurred, which is when, for economic or legal reasons related to
a borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. Terms
may be modified to fit the ability of the borrower to repay in line with its current financial status and the restructuring of the loan
may include the transfer of assets from the borrower to satisfy the debt, a modification of loan terms, or a combination of the two. If
such efforts by the Company do not result in a satisfactory arrangement, the loan is referred to legal counsel, at which time foreclosure
proceedings are initiated. At any time prior to a sale of the property at foreclosure, the Company may terminate foreclosure proceedings
if the borrower is able to work-out a satisfactory payment plan.

 

It is the Company’s policy to
have any restructured loans which are on nonaccrual status prior to being restructured remain on nonaccrual status until six months of
satisfactory borrower performance at which time management would consider its return to accrual status. If a loan was accruing at the
time of restructuring, the Company reviews the loan to determine if it is appropriate to continue the accrual of interest on the restructured
loan.

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

With regard to determination of the
amount of the allowance for credit losses, trouble debt restructured loans are considered to be impaired. As a result, the determination
of the amount of impaired loans for each portfolio segment within troubled debt restructurings is the same as detailed previously.

 

Earnings Per Share

 

Earnings per share (EPS) were computed as follows:

 

    Three Months Ended March 31, 2021  
          Weighted-        
    Net     Average     Per Share  
    Income     Shares     Amount  
    (In thousands)              
Net income   $ 1,908                  
Less allocated earnings on non-vested restricted stock     (78 )                
Less allocated dividends on non-vested restricted stock     (25 )                
Net income allocated to common stockholders     1,805                  
              5,472,033          
Basic and diluted earnings per share                   $ 0.33  

 

    Three Months Ended March 31, 2020  
          Weighted-        
    Net     Average     Per Share  
    Income     Shares     Amount  
    (In thousands)              
Net income   $ 1,579                  
Less allocated earnings on non-vested restricted stock     (32 )                
Less allocated dividends on non-vested restricted stock     (35 )                
Net income allocated to common stockholders     1,512                  
              5,463,739          
Basic and diluted earnings per share                   $ 0.28  

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements 

(Unaudited)

 

Income Taxes

 

The Company is subject to income taxes
in the U.S. federal jurisdiction, as well as various state jurisdictions. Tax regulations within each jurisdiction are subject to the
interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is
no longer subject to U.S. federal, state and local income tax examinations by tax authorities for the years before 2017.

 

Recent Accounting Pronouncements

 

In June 2016, the FASB issued ASU No.
2016-13, “Financial Instruments-Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments.”
The provisions of ASU 2016-13 were issued to provide financial statement users with more decision-useful information about the expected
credit losses on financial instruments that are not accounted for at fair value through net income, including loans held for investment,
held-to-maturity debt securities, trade and other receivables, net investment in leases and other commitments to extend credit held by
a reporting entity at each reporting date. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net
amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The amendments
in ASU 2016-13 eliminate the probable incurred loss recognition in current GAAP and reflect an entity’s current estimate of all
expected credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable
and supportable forecasts that affect the collectability of the financial assets. 

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

For purchased financial assets with
a more-than-insignificant amount of credit deterioration since origination (“PCD assets”) that are measured at amortized cost,
the initial allowance for credit losses is added to the purchase price rather than being reported as a credit loss expense. Subsequent
changes in the allowance for credit losses on PCD assets are recognized through the statement of income as a credit loss expense. 

 

Credit losses relating to available-for-sale
debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. 

 

On October 16, 2019, FASB approved
a final ASU delaying the effective date of ASU 2016-13 for small reporting companies to interim and annual periods beginning after December
15, 2022. The Company is currently evaluating the impact of these amendments to the Company’s financial position and results of
operations and currently does not know or cannot reasonably quantify the impact of the adoption of the amendments as a result of the complexity
and extensive changes from the amendments. The Allowance for Loan Losses (ALL) estimate is material to the Company and given the change
from an incurred loss model to a methodology that considers the credit loss over the life of the loan, there is the potential for an increase
in the ALL at adoption date. The Company is anticipating a significant change in the processes and procedures to calculate the ALL, including
changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice
that utilizes the incurred loss model. In addition, the current accounting policy and procedures for the other-than-temporary impairment
on available-for-sale securities will be replaced with an allowance approach. The Company continues to run projections and review segmentation
to ensure it is fully compliant with the amendments at adoption date. Additional work will be needed once additional guidance or clarification
in the standard is given during the delay. For additional information on the allowance for loan losses, see Note 3.

  

 

The amortized cost and fair values, together with gross
unrealized gains and losses of securities are as follows:

 

   

Amortized

Cost

   

Gross

Unrealized

Gains

   

Gross

Unrealized

Losses

    Fair Value  
                         
    (In thousands)  
Available-for-sale Securities:                                
March 31, 2021:                                
U.S. government agencies   $ 4,000     $ 22     $     $ 4,022  
                                 
Subordinated notes     4,500       25       (2 )     4,523  
State and municipal obligations     125,998     $ 11,770             137,768  
Total debt securities   $ 134,498     $ 11,817     $ (2 )   $ 146,313  

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

   

Amortized

Cost

    Gross
Unrealized
Gains
    Gross
Unrealized
Losses
    Fair Value  
                         
    (In thousands)  
Available-for-sale Securities:                                
December 31, 2020:                                
U.S. government agencies   $ 10,000     $ 53     $     $ 10,053  
                                 
Subordinated notes     4,500       6       (1 )     4,505  
State and municipal obligations     129,006     $ 14,503             143,509  
Total debt securities   $ 143,506     $ 14,562     $ (1 )   $ 158,067  

 

The amortized cost and fair value of
available-for-sale securities at March 31, 2021, by contractual maturity, are shown below. Expected maturities will differ from contractual
maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

    Amortized
Cost
    Fair
Value
 
             
    (In thousands)  
Under 1 year   $     $  
One to five years            
Five to ten years     8,500       8,545  
Over ten years     125,998       137,768  
                 
Totals   $ 134,498     $ 146,313  

 

The carrying value of securities pledged
as collateral, to secure public deposits and for other purposes, was $57.2 million and $55.8 million at March 31, 2021 and December 31,
2020, respectively.

 

Certain investments in debt securities
are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at March
31, 2021 was $998,000, which represented less than 1{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of the Company’s available-for-sale investment portfolio. The total fair value
of these investments at December 31, 2020 was $1.0 million, which represented less than 1{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of the Company’s available-for-sale.

 

Based on evaluation of available evidence,
including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management
believes the declines in fair value for these securities are temporary and are a result of an increase in longer term interest rates.

 

 

United
Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Should the impairment of any of these
securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income
in the period the other-than-temporary impairment is identified.

 

The following tables show the Company’s
investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities
have been in a continuous unrealized loss position at March 31, 2021:

 

    March 31, 2021              
    Less than 12 Months     12 Months or More     Total  
Description of
Securities
  Fair Value     Unrealized
Losses
    Fair Value     Unrealized
Losses
    Fair Value     Unrealized
Losses
 
                                     
(In thousands)
U.S. Government agencies   $     $     $     $     $     $  
State and municipal obligations                                    
Subordinated notes     998       (2 )                 998       (2 )
Total temporarily impaired securities   $ 998     $ (2 )   $     $     $ 998     $ (2 )

 

 

    December 31, 2020      
    Less than 12 Months     12 Months or More     Total  
Description of
Securities
  Fair Value     Unrealized
Losses
    Fair Value     Unrealized
Losses
    Fair Value     Unrealized
Losses
 
                                     
(In thousands)
US government agencies   $     $     $     $     $     $  
Subordinated notes                 1,000       (1     1,000       (1 )
 State and municipal obligations   $                                                                             
 Total temporarily impaired securities   $     $       $ 1,000     $ (1   $ 1,000     $ (1 )

 

The unrealized losses on the Company’s
investments in available for sale securities were caused primarily by interest rate changes. The contractual terms of those investments
do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company
does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before
recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily
impaired at March 31, 2021.

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

During the quarter ended March 31,
2020 the Company sold $8.0 million of US Government Agency bonds for a total gain of approximately $69,000. There were no sales of investment
securities for the three months ended March 31, 2021.

 

Note 3: Loans and Allowance for Loan Losses

 

Categories of loans include:

 

    March 31,     December 31,  
    2021     2020  
             
    (In thousands)  
Commercial loans   $ 99,728     $ 103,277  
Commercial real estate     254,577       246,167  
Residential real estate     88,114       85,789  
Installment loans     7,615       8,258  
                 
Total gross loans     450,034       443,491  
                 
Less allowance for loan losses     (4,807 )     (5,113 )
                 
Total loans   $ 445,227     $ 438,378  

 

The risk characteristics of each loan portfolio segment
are as follows:

 

Commercial

 

Commercial loans are primarily based
on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of
borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured
by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee.
Short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for
the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Commercial Real Estate

 

Commercial real estate loans are viewed
primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher
loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the
loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions
in the real estate markets or in the general economy. The characteristics of properties securing the Company’s commercial real estate
portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates
commercial real estate loans based on collateral, geography and risk grade criteria. In general, the Company avoids financing single purpose
projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied
commercial real estate versus nonowner-occupied loans.

 

Residential Real Estate and Consumer

 

Residential real estate and consumer
loans consist of two segments – residential mortgage loans and personal loans. For residential mortgage loans that are secured by 1-4
family residences and are generally owner-occupied, the Company generally establishes a maximum loan-to-value ratio and requires private
mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences,
and consumer personal loans are secured by consumer personal assets, such as automobiles or recreational vehicles. Some consumer personal
loans are unsecured, such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the
personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment
can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller
individual amounts and spread over a large number of borrowers.

 

Allowance for Loan Losses and Recorded Investment
in Loans

As of and for the three month period ended March
31, 2021

 

    Commercial     Commercial
Real
Estate
    Residential     Installment     Total  
(In
thousands)
Allowance for loan losses:                                        
Balance,
beginning of period
  $ 1,397     $ 1,821     $ 1,471     $ 424     $ 5,113  
Provision
(credit) charged to expense
    (98     (1     (75     (31     (205
Losses
charged off
    (78 )           (17 )     (18 )     (113 )
Recoveries                 2       10       12  
Balance,
end of period
  $ 1,221     $ 1,820     $ 1,381     $ 385     $ 4,807  
Ending
balance:  individually evaluated for impairment
  $     $ 85     $     $     $ 85  
Ending
balance:  collectively evaluated for impairment
  $ 1,221     $ 1,735     $ 1,381     $ 385     $ 4,722  
                                         
Loans:                                        
Ending
balance:  individually evaluated for impairment
  $     $ 2,594     $ 114     $     $ 2,708  
Ending
balance:  collectively evaluated for impairment
  $ 99,728     $ 251,983     $ 88,000     $ 7,615     $ 447,326  

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Allowance for Loan Losses and Recorded Investment
in Loans

As of and for the three month period ended March
31, 2020

 

    Commercial     Commercial
Real Estate
    Residential     Installment     Total  
(In
thousands)
Allowance for loan losses:                                        
Balance,
beginning of period
  $ 568     $ 792     $ 572     $ 299     $ 2,231  
Provision
charged to expense
    529       19       1       14       563  
Losses
charged off
    (42 )     (30 )     (6 )     (31 )     (109 )
Recoveries                       23       23  
Balance,
end of period
  $ 1,055     $ 781     $ 567     $ 305     $ 2,708  
Ending
balance:  individually evaluated for impairment
  $ 16     $     $     $     $ 16  
Ending
balance:  collectively evaluated for impairment
  $ 1,039     $ 781     $ 567     $ 305     $ 2,692  
                                         
Loans:                                        
Ending
balance:  individually evaluated for impairment
  $ 138     $ 758     $ 505     $     $ 1,401  
Ending
balance:  collectively evaluated for impairment
  $ 106,338     $ 251,593     $ 79,646     $ 9,359     $ 446,936  

 

Allowance for Loan Losses and Recorded Investment
in Loans

As of December 31, 2020

 

    Commercial     Commercial Real Estate     Residential     Installment     Total  
                               
    (In thousands)  
Allowance for loan losses:                                        
Ending balance:  individually evaluated for impairment   $ ––     $ 1     $ ––     $ ––     $ 1  
Ending balance:  collectively
evaluated for impairment
  $ 1,397     $ 1,820     $ 1,471     $ 424     $ 5,112  
                                         
Loans:                                        
Ending balance:  individually
evaluated for impairment
  $ 80     $ 182     $ 114     $ ––     $ 376  
Ending balance:  collectively
evaluated for impairment
  $ 103,197     $ 245,985     $ 85,675     $ 8,258     $ 443,115  

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following tables show the portfolio quality indicators.

 

    March 31, 2021  
Loan Class   Commercial     Commercial Real Estate     Residential     Installment     Total  
                               
    (In thousands)        
Pass Grade   $ 99,721     $ 248,895     $ 88,000     $ 7,615     $ 444,231  
Special Mention     7       2,885                   2,892  
Substandard           2,797       114             2,911  
Doubtful                              
                                         
    $ 99,728     $ 254,577     $ 88,114     $ 7,615     $ 450,034  

 

    December 31, 2020  
Loan Class   Commercial     Commercial Real Estate     Residential     Installment     Total  
                               
    (In thousands)        
Pass Grade   $ 103,181     $ 239,862     $ 85,675     $ 8,258     $ 436,976  
Special Mention     15       3,422                   3,437  
Substandard     81       2,883       114             3,078  
Doubtful                              
                                         
    $ 103,277     $ 246,167     $ 85,789     $ 8,258     $ 443,491  

 

To facilitate the monitoring of credit
quality within the loan portfolio, and for purposes of analyzing historical loss rates used in the determination of the ALLL, the Company
utilizes the following categories of credit grades: pass, special mention, substandard, and doubtful. The four categories, which are derived
from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter.
Pass ratings, which are assigned to those borrowers that do not have identified potential or well defined weaknesses and for which there
is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All
other categories are updated on at least a quarterly basis.

 

The Company assigns a special mention
rating to loans that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses
may, at some future date, result in the deterioration of the repayment prospects for the loan or the Company’s credit position.

 

The Company assigns a substandard rating
to loans that are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged.
Substandard loans have well defined weaknesses or weaknesses that could jeopardize the orderly repayment of the debt. Loans and leases
in this grade also are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies noted are
not addressed and corrected.

 

The Company assigns a doubtful rating
to loans that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation
in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss
is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen
the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined.
Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional
collateral or refinancing plans.

 

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Company evaluates the loan risk
grading system definitions and allowance for loan losses methodology on an ongoing basis. No significant changes were made to either during
the past year to date period.

 

Loan Portfolio Aging Analysis

As of March 31, 2021

 

    30-59 Days Past Due and Accruing     60-89 Days Past Due and Accruing     Greater Than 90 Days and Accruing     Non Accrual    

Total Past

Due and Non Accrual

    Current     Total Loans Receivable  
                                           
    (In thousands)  
Commercial   $ 124     $     $     $     $ 124     $ 99,604     $ 99,728  
Commercial real estate                       2,586       2,586       251,991       254,577  
Residential           74             377       451       87,663       88,114  
Installment                       19       19       7,596       7,615  
Total   $ 124     $ 74     $     $ 2,982     $ 3,180     $ 446,854     $ 450,034  

 

Loan Portfolio Aging Analysis

As of December 31, 2020

 

    30-59
Days Past Due and Accruing
    60-89
Days Past Due and Accruing
    Greater
Than 90 Days and Accruing
    Non
Accrual
    Total
Past Due and Non Accrual
    Current     Total
Loans Receivable
 
                                           
    (In thousands)  
Commercial   $     $     $     $ 83     $ 83     $ 103,194     $ 103,277  
Commercial real estate                       98       98       246,069       246,167  
Residential     120       59             445       624       85,165       85,789  
Installment     7       20                   27       8,231       8,258  
Total   $ 127     $ 79     $     $ 626     $ 832     $ 442,659     $ 443,491  

 

A loan is considered impaired, in
accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the
Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans
include nonperforming commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted
to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment
extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Impaired Loans

 

    As of
March 31, 2021
  Three Months Ended
March 31, 2021
 
    Recorded Balance  

Unpaid

Principal Balance

  Specific Allowance   Average Investment in
Impaired Loans
  Interest Income Recognized  
                       
    (In thousands)  
Loans without a specific valuation allowance:                                
Commercial   $   $   $   $   $  
Commercial real estate     105     105         112      
Residential     114     114         118      
      219     219         230      
Loans with a specific valuation allowance:                                
Commercial                      
Commercial  real estate     2,489     2,489     85     2,489      
Residential                      
      2,489     2,489     85     2,489      
Total:                                
Commercial   $   $     $   $   $  
Commercial real estate   $ 2,594   $ 2,594   $ 85   $ 2,601   $  
Residential   $ 114   $ 114   $   $ 118   $  

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Impaired Loans

 

    As of
December 31, 2020
    Three Months Ended
March 31, 2020
 
    Recorded
Balance
    Unpaid
Principal
Balance
    Specific
Allowance
    Average
Investment in
Impaired
Loans
    Interest
Income
Recognized
 
                               
    (In thousands)  
Loans without a specific valuation allowance:                                        
Commercial   $ 80     $ 80     $     $ 101     $ 7  
Commercial real estate     110       196             761        
Residential     114       121             590       2  
Installment           14                    
      304        411              1,452       9  
Loans with a specific valuation allowance:                                        
Commercial                           42       1  
Commercial  real estate     72     $ 72       1              
Residential     ––       ––                    
      72       72       1       42       1  
Total:                                        
Commercial   $ 80     $ 80     $     $ 143     $ 8  
Commercial real estate   $ 182         268     $ 1     $ 761     $  
Residential   $ 114         121     $     $ 590     $ 2  
Installment   $ —         14     $     $     $  

 

Interest income recognized on a cash basis was not materiality
different than interest income recognized.

 

 

United Bancorp,
Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

For the TDRs noted in the tables below,
the Company extended the maturity dates and granted interest rate concessions as part of each of those loan restructurings. The loans
included in the tables are considered impaired and specific loss calculations are performed on the individual loans. In conjunction with
the restructuring there were no amounts charged-off.

 

    Three Months ended March 31, 2021  
    Number of
Contracts
    Pre-
Modification
Outstanding
Recorded
Investment
    Post-
Modification
Outstanding
Recorded
Investment
 
                   
    (In thousands)  
Commercial     1     $ 86     $ 67  
Commercial real estate                  
Residential                  
Installment                  

 

    Three Months ended March 31, 2021  
    Interest
Only
    Term     Combination     Total
Modification
 
                         
    (In thousands)  
Commercial   $     $ 67     $     $ 67  
Commercial real estate                        
Residential                        
Consumer                        

 

      Three Months ended March 31, 2020  
      Number of
Contracts
      Pre- Modification
Outstanding
Recorded
Investment
      Post-Modification
Outstanding
Recorded
Investment
 
                         
      (In thousands)  
Commercial     2     $ 83     $ 83  
Commercial real estate                  
Residential                  
Installment                  

 

    Three Months ended March 31, 2020  
      Interest
Only
      Term       Combination       Total
Modification
 
                                 
      (In thousands)  
Commercial   $     $ 83     $     $ 83  
Commercial real estate                          
Residential                        
Consumer                        


 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

During the three months ended March
31, 2021 and 2020, there were no material defaults of any troubled debt restructurings that were
modified in the last 12 months. The Company generally considers TDR’s that become 90 days or more past due under the modified terms
as subsequently defaulted.

 

 

Pension expense includes the following:

 

    Three months ended
March 31,
 
    2021     2020  
             
    (In thousands)  
Service cost   $ 132     $ 98  
Interest cost     60       59  
Expected return on assets     (122 )     (117 )
Amortization of prior service cost and net loss     45       13  
                 
Pension expense   $ 115     $ 53  

 

All components
of pension expense are reflected within the salaries and employee benefits line of the income statement.

 

Note 5: Off-balance-sheet Activities

 

Some financial instruments, such as
loan commitments, credit lines, letters of credit and overdraft protection, are issued to meet customer financing needs. These are agreements
to provide credit or to support the credit of others, as long as conditions established in the contracts are met, and usually have expiration
dates. Commitments may expire without being used. Off-balance-sheet risk to credit loss exists up to the face amount of these instruments,
although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including
obtaining collateral at exercise of the commitment.

 

A summary of the notional or contractual amounts of financial
instruments with off-balance-sheet risk at the indicated dates is as follows:

 

    March 31,     December 31,  
    2021     2020  
             
    (In thousands)  
Commercial loans unused lines of credit   $ 63,153     $ 49,384  
Commitment to originate loans     60,710       49,035  
Consumer open end lines of credit     38,167       39,559  
Standby lines of credit     46       22  

 

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 6: Accumulated Other Comprehensive Income

 

The components of accumulated other
comprehensive loss, included in stockholders’ equity, are as follows:

 

    March 31,
2021
    December 31,
2020
 
             
    (In thousands)  
Net unrealized gain (loss) on securities available-for-sale   $ 11,815     $ 14,561  
Net unrealized loss for unfunded status of defined benefit plan liability     (2,810 )     (2,810 )
      9,005       11,751  
Less: Tax effect     (1,892 )     (2,468 )
Net-of-tax amount   $ 7,113     $ 9,283  

 

Reclassifications out of accumulated other
comprehensive income during the three months ended March 31, 2021 and 2020 and the affected line items in the Consolidated Financial
Statements of Income were as follows:

 

    2021     2020  
             
    (In thousands)  
Realized gains on securities available-for-sale   $     $ 69  
Less provision for federal income taxes           14  
Reclassification adjustment, net of taxes   $     $ 55  

 

Note 7: Fair Value Measurements

 

The Company defines fair value as the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. The Company also utilizes a fair value hierarchy which requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used
to measure fair value:

 

  Level 1 Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date
     
  Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
     
  Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Following is a description of the valuation
methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets,
as well as the general classification of such instruments pursuant to the valuation hierarchy.

 

Available-for-sale Securities

 

Where quoted market prices are available
in an active market, securities are classified within Level 1 of the valuation hierarchy. The Company’s equity securities are
classified within Level 1 of the hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted
prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based
or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults,
cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy.

 

The following table presents the fair
value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and
the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2021 and December 31, 2020:

 

          Fair Value Measurements Using  
    Fair Value    

Quoted Prices
in Active
Markets for
Identical Assets

(Level 1)

   

Significant
Other
Observable
Inputs

(Level 2)

   

Significant
Unobservable
Inputs

(Level 3)

 
                         
    (In thousands)  
March 31, 2021                                
U.S. government agencies   $ 4,022     $     $ 4,022     $  
Subordinated Notes   $ 4,523           $ 4,523        
State and municipal obligations   $ 137,768           $ 137,768        
                                 
December 31, 2020                                
U.S. government agencies   $ 10,053     $     $ 10,053     $  
Subordinated Notes   $ 4,505           $ 4,505        
State and municipal obligations   $ 143,509     $     $ 143,509     $  

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Following is a description of the valuation
methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets,
as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the
fair value hierarchy, the process used to develop the reported fair value is described below.

 

Impaired Loans (Collateral Dependent)

 

Collateral dependent impaired loans
consisted primarily of loans secured by nonresidential real estate. Management has determined fair value measurements on impaired loans
primarily through evaluations of appraisals performed. Due to the nature of the valuation inputs, impaired loans are classified within
Level 3 of the hierarchy.

 

The Company considers the appraisal
or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may
affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to
be collateral-dependent and subsequently as deemed necessary by the Company’s Chief Lender. Appraisals are reviewed for accuracy
and consistency by the Company’s Chief Lender. Appraisers are selected from the list of approved appraisers maintained by management.
The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction
of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the Company’s Chief Lender
by comparison to historical results.

 

Foreclosed Assets Held for Sale

 

Assets acquired through, or in lieu
of, loan foreclosure are held for sale and are initially recorded at fair value (based on current appraised value) at the date of foreclosure,
establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried
at the lower of carrying amount or fair value less cost to sell. Management has determined fair value measurements on other real estate
owned primarily through evaluations of appraisals performed, and current and past offers for the other real estate under evaluation. Due
to the nature of the valuation inputs, foreclosed assets held for sale are classified within Level 3 of the hierarchy.

 

Appraisals of OREO are obtained when
the real estate is acquired and subsequently as deemed necessary by the Company’s Chief lender. Appraisals are reviewed for accuracy
and consistency by the Company’s Chief Lender and are selected from the list of approved appraisers maintained by management.

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following table presents the
fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring
basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2021 and December 31, 2020.

 

          Fair Value Measurements Using  
    Fair
Value
    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
    Significant
Other
Observable
Inputs
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
                         
    (In thousands)  
March 31, 2021                                
Collateral dependent impaired loans   $ 2,489     $     $     $ 2,489  
Foreclosed assets held for sale                        
                                 
December 31, 2020                                
Collateral dependent impaired loans   $ 71     $     $     $ 71  
Foreclosed assets held for sale                        

 

Unobservable (Level 3) Inputs

 

The following table presents quantitative information about
unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.

 

    Fair Value at
3/31/21
    Valuation
Technique
  Unobservable Inputs   Range
                   
    (In thousands)
Collateral-dependent impaired loans   $ 2,489     Market comparable properties   Comparability adjustments   5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} – 10{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

    Fair Value
at 12/31/20
    Valuation
Technique
  Unobservable Inputs   Range  
                     
    (In thousands)  
Collateral-dependent impaired loans   $ 71     Market comparable properties   Comparability adjustments     5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} – 10{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}  

 

There were no significant changes in the valuation techniques used
during 2020.

 

The following table presents estimated fair values
of the Company’s financial instruments. The fair values of certain of these instruments were calculated by discounting expected
cash flows, which involves significant judgments by management and uncertainties. Because no market exists for certain of these financial
instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values
shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

 

          Fair Value Measurements Using  
    Carrying
Amount
    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
    Significant
Other
Observable
Inputs
(Level 2)
    Significant
Unobservable
Inputs
(Level 3)
 
                         
    (In thousands)  
March 31, 2021:                                
                                 
Financial assets                                
Cash and cash equivalents   $ 97,051     $ 97,051     $     $  
Loans, net of allowance     445,227                   443,931  
Federal Home Loan Bank stock     4,097             4,097        
Accrued interest receivable     2,581             2,581        
                                 
Financial liabilities                                
Deposits     608,022             608,434        
Short term borrowings     27,180             27,180        
Subordinated debentures     23,619             21,246        
Interest payable     549             549        

 

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

          Fair Value Measurements Using  
    Carrying
Amount
    Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
   

Significant
Other
Observable
Inputs

(Level 2)

   

Significant
Unobservable

Inputs

(Level 3)

 
    (In thousands)  
December 31, 2020:                                
                                 
Financial assets                                
Cash and cash equivalents   $ 51,592     $ 51,592     $ ––     $ ––  
Loans, net of allowance     438,378       ––       ––       436,893  
Federal Home Loan Bank stock     4,177       ––       4,177       ––  
Accrued interest receivable     2,901       ––       2,901       ––  
                                 
Financial liabilities                                
Deposits     579,535       ––       580,130       ––  
Short term borrowings     12,705       ––       12,705       ––  
Subordinated debentures     23,604       ––       21,989       ––  
Interest payable     224       ––       224       ––  

 

The following methods and assumptions were used to estimate
the fair value of each class of financial instruments.

 

Cash and Cash Equivalents, Accrued Interest Receivable
and Federal Home Loan Bank Stock

 

The carrying amounts approximate fair value.

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Loans

 

Fair values of loans and leases are
estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

 

Deposits

 

Deposits include demand deposits, savings
accounts, NOW accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity
time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining
maturities.

 

Interest Payable

 

The carrying amount approximates fair
value.

 

Short-term Borrowings, Federal
Home Loan Bank Advances and Subordinated Debentures

 

Rates currently available to the Company
for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

 

Commitments to Originate Loans,
Letters of Credit and Lines of Credit

 

The fair value of commitments to originate
loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements
and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between
current levels of interest rates and the committed rates. The fair values of letters of credit and lines of credit are based on fees currently
charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the
reporting date. Fair values of commitments were not material at March 31, 2021 and December 31, 2020.

 

Note 8: Repurchase Agreements

 

Securities sold under agreements to repurchase (“repurchase
agreements”) with customers represent funds deposited by customers, generally on an overnight basis that are collateralized by investment
securities owned by the Company.

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following table presents the Company’s repurchase
agreements accounted for as secured borrowings:

 

Remaining Contractual Maturity of the Agreement

 

(In thousands)

 

March
31, 2021
  Overnight

and Continuous
    Up
to 30 Days
    30-90
Days
    Greater
than 90 Days
    Total  
Repurchase Agreements                                        
U.S.
government agencies
  $ 27,180       ––       ––       ––     $ 27,180  
Total   $ 27,180     $ ––     $ ––     $ ––     $ 27,180  

 

(In thousands)

 

December
31, 2020
  Overnight

and
Continuous
    Up
to 30 Days
    30-90
Days
    Greater
than
90 Days
    Total  
Repurchase Agreements                                        
U.S.
government agencies
  $ 12,705     $ ––     $ ––     $ ––     $ 12,705  
Total   $ 12,705     $ ––     $ ––     $ ––     $ 12,705  

 

 

These borrowings were collateralized with U.S. government and agency
securities with a carrying value of $32.6 million at March 31, 2021 and $30.1 million at December 31, 2020. Declines in the fair value
would require the Company to pledge additional securities.

 

Note 9: Core Deposits and Other Intangible Assets

 

The following table shows the changes in the carrying amount of goodwill
for March 31, 2021 and December 31, 2020 (in thousands):

 

    March 31 ,
2021
    December 31, 2020  
Balance beginning of year   $ 682     $ 682  
Additions from acquisition     ––       ––  
Balance, end of period   $ 682     $ 682  

  

Intangible assets in the consolidated balance sheets at March 31, 2021
and December 31, 2020 were as follows (in thousands):

 

 

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

    Three
Months Ended
March 31, 2021
    Year
Ended
December 31, 2020
 
    Gross

Intangible
Assets
    Accumulated
Amortization
    Net

Intangible
Assets
    Gross

Intangible
Assets
    Accumulated
Amortization
    Net

Intangible
Assets
 
Core deposit intangibles   $ 1,041       368       673       1,041       331       710  

 

The estimated aggregate future amortization expense for each
of the next five years for intangible assets remaining as of March 31, 2021 is as follows (in thousands):

 

2021   $ 116  
2022     150  
2023     150  
2024     150  
2025     110  

 

At each reporting date between annual goodwill
impairment tests, the Company considers potential indicators of impairment. Given the current economic uncertainty and volatility surrounding
COVID-19, the Company assessed whether the events and circumstances resulted in it being more likely than not that the fair value of any
reporting unit was less than its carrying value. Impairment indicators considered comprised the condition of the economy and banking industry;
government intervention and regulatory updates; the impact of recent events to financial performance and cost factors of the reporting
unit; performance of the Company’s stock and other relevant events. The Company further considered the amount by which fair
value exceeded book value in the most recent quantitative analysis and sensitivities performed.   At the conclusion of the assessment,
the Company determined that as of March 31, 2021 it was more likely than not that the fair value exceeded its carrying values. 
The Company will continue to monitor developments regarding the COVID-19 pandemic and measures implemented in response to the pandemic,
market capitalization, overall economic conditions and any other triggering events or circumstances that may indicate an impairment of
goodwill in the future.

 

 

United Bancorp, Inc.

Management’s Discussion and Analysis of
Financial

Condition and Results of Operations

 

The following discusses the financial condition
of the Company as of March 31, 2021, as compared to December 31, 2020, and the results of operations for the three months ended March
31, 2021, compared to the same period in 2020. This discussion should be read in conjunction with the interim condensed consolidated financial
statements and related footnotes included herein.

 

Introduction

 

United Bancorp, Inc. reported diluted earnings per share of $0.33 and
net income of $1,908,000 for the three months ended March 31, 2021, as compared to its previous first quarter record level for diluted
earnings per share of $0.28, which was achieved in the first quarters of both 2019 and 2020. Even though our economy has not fully recovered
from the impact of the events that have occurred over the course of the past twelve months, United Bancorp, Inc. reported record earnings
performance for the first three months of 2021. For the quarter ending March 31, 2021, our Company achieved net income of $1,908,000 and
diluted earnings per share of $0.33, which was an increase of $329,000, or 21{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, and $0.05, or 18{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, respectively over the previous year.
We are truly proud of these earnings levels, which reflect record performance for our Company for the first quarter. Our Company achieved
this level of earnings performance even though we only saw marginal growth in our loan portfolio and a fairly substantial decline in our
securities portfolio balances. As of March 31, 2021, gross loans were $450.0 million, which was an increase of $1.7 million, or 0.38{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb},
over the previous year. In addition, securities and other restricted stock was $150.4 million, which was a decrease of $51.4 million,
or 25.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, from the previous year. Each of these levels are reflective of the conservative posturing that our Company has taken since the
inception of the COVID-19 pandemic. In particular, the decline in our securities and other restricted stock is related to the sale of
approximately $32.0 million in agency and municipal investment securities, which produced significant gains for our Company last year
in the second and third quarters. We firmly believe that this was a prudent action to take last year to help fortify our loan loss reserve
and protect our bottom line net income. But, this action— along with weaker loan production in this current economic environment—
has led to a reduction in the level of both interest income and loan fees generated in the current year. As of March 31, 2021, total interest
income, including loan fees, was down $1.23 million, or 16.8{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, from the previous year. We are optimistic that as our economy starts to
recover more fully, as we are starting to see in recent months, that we will have better opportunities to leverage our securities portfolio
more in-line with our previous level and ramp-up our loan production to levels at which we are more historically accustomed; therefore,
increasing our level of higher yielding earning assets and generating more interest and loan fee income.

 

As previously disclosed, our Company was properly
positioned from a liability-sensitivity perspective to benefit from the rapid decline in interest rates last year. Even though we saw
a significant inflow of retail funding over the course of the past twelve months, as most financial institutions have, we were able to
lower our interest expense levels to help mitigate the decline in the level of net interest income that our Company achieved in this highly
volatile environment. As of March 31, 2021, total deposits increased $52.5 million or 9.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. We saw low cost retail funding, consisting
of demand and savings balances, increase by $77.1 million, or 16.9{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, while our higher-cost time deposit balances declined by $24.6 million
or 24.9{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. Even with the overall increase in our total deposits, we were able to reduce total interest expense by $910,000, or 54.0{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, year-over-year.
Although we were able to substantially reduce total interest expense, our Company still experienced an overall decrease in the level of
net interest income that it achieved of $321,000, a decline of 5.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} from the previous year.

 

United Bancorp has successfully maintained overall
strength and stability within our loan portfolio over the course of the COVID-19 pandemic and this trend continues for our Company. We
continue to have very solid credit quality-related metrics supported by a relatively low level of nonaccrual loans and loans past due
30 plus days, which were $3.18 million, or 0.71{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of total loans as of March 31, 2021, compared to $2.62 million, or 0.58{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, the previous
year. This slight increase is attributed to one hospitality-related loan that went on non-accrual status during the first quarter of this
year with a balance of approximately $2.5 million for which we allocated a portion to specific reserves. Barring this one-off situation,
our overall levels in this area have declined over the course of the past twelve months. Further, net loans charged off, excluding overdrafts,
was $91,000, or 0.09{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} annualized. Giving strong consideration to our overall solid credit related metrics and the improving economy, our
Company had credit reserve releases of $205,000 during the first quarter of 2021. Even with this aforementioned release, our total allowance
for loan losses total loans was 1.07{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} as of quarter end, versus 0.60{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} the previous year. Our Company continues to be very well capitalized
with equity to assets as of the most recent quarter end of 9.1{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} and total shareholders’ equity of $66.7 million, an increase of
$3.8 million, or 6.0{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, over the previous year.

 

  

United Bancorp,
Inc.

Management’s Discussion and Analysis of
Financial

Condition and Results of Operations

  

Even though we achieved record earnings
performance, United Bancorp is starting to feel the negative impact of the lingering slow-down of our economy. Although we are
beginning to see the proverbial light at the end of the tunnel regarding improvement within our economy, we are currently
experiencing a slow-down in the growth of our earning assets— primarily our “high return” assets such as loans and
municipal securities— and, an extreme build-up of our cash balances at the Federal Reserve Bank (FRB) due to the mass inflow of
retail-based funding related to the various governmental efforts to stimulate our stagnant economy over the course of this past
year. With this reality, this past quarter we experienced a decline in the year-over-year growth in our net interest income and
compression of our net interest margin for the first time in several years. We are relieved to see the accelerating recovery of our
economy in recent months. Although things continue to remain uncertain and we are not at the end of the tunnel yet, we are highly
optimistic that our economy will trend more toward pre-COVID-19 pandemic levels within the next twelve to twenty-four months as the
impacts of both the vaccine and government stimulus take root. With this normalization of our economy, we anticipate that we will
see an increased demand for our consumer and commercial loan products and a better opportunity to, once again, more fully leverage
our investment portfolio. Each of these should have a positive impact on the level of total interest income and fees that our
Company generates. In addition, we anticipate either more effectively deploying or seeing runoff in the balances that we currently
have parked at the FRB earning a mere ten (10) basis points. Each of these should have a positive impact on the level of net
interest income that our Company realizes and our overall net interest margin.

 

United Bancorp remains highly focused on protecting
the investment of our shareholders and rewarding them at a high level by growing their value and paying an attractive dividend. Accordingly,
we will always focus on being an efficient, productive and profitable company that is well capitalized. In these areas, our shareholders
have been nicely rewarded with a year-over-year increase in the cash dividends paid of $0.10, or 70.2{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (inclusive of a special cash dividend
of $0.10 paid in the first quarter of this year), and a market value increase of $3.30, or 30.0{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, to a level of $14.32 as of March 31,
2021. These past twelve months have been very challenging ones for our Company but these challenges have made us a more fundamentally
sound company with a focus on the potential of the future. Focusing internally, we have improved many of our processes over the course
of the past year, which has led to various efficiency gains and optimization of our delivery. We have eliminated unnecessary expenses
while spending money on our technological infrastructure, so that we can more effectively compete within our industry delivering our services
in a manner that is demanded by the markets that we proudly serve. As we progress into this current year, we will continue keenly focusing
on these two areas in order to remain relevant. Although the COVID-19 pandemic and related economic slowdown took us off our course of
growth, we still have our sights set on becoming a $1.0 billion community banking organization in order to be at a scale to achieve what
we seek. We can only realize this vision by having robust organic growth and capitalizing on acquisition related opportunities for which
our Company is strongly positioned at present. With the current economic rebound that we are experiencing, we firmly believe that we will
see growth relating to each of these aforementioned areas in the near term.

 

  

United Bancorp,
Inc.

Management’s Discussion and Analysis of
Financial

Condition and Results of Operations

 

Forward-Looking Statements

 

When used in this document, the words or phrases
“will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,”
“projected” 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 changes
in economic conditions in the Bank’s market areas, changes in policies by regulatory agencies, fluctuations in interest rates, demand
for loans in the Bank’s market areas and competition, 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.

 

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.

 

 

United Bancorp,
Inc.

Management’s Discussion and Analysis of
Financial

Condition and Results of Operations

 

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.

 

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.

 

Based on its consideration of accounting policies
that involve the most complex and subjective decisions and assessments, management has identified its most critical accounting policies
to be those which are related to the allowance for loan losses. The procedures for assessing the adequacy of the allowance for loan losses
reflect our evaluation of credit risk after careful consideration of all information available to management. In developing this assessment,
management must rely on estimates and exercise subjective judgment regarding matters where the ultimate outcome is unknown such as economic
factors, developments 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
and the board to determine whether the amount is considered adequate to absorb probable losses. This evaluation includes specific loss
estimates on certain individually reviewed loans, statistical loss 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 judgment is a review of the Bank’s trend 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 loan losses inherent in the loan portfolio. Management’s evaluation of
the adequacy of the allowance is an estimate based on management’s current judgment about the credit quality of the loan portfolio.
While the Company strives to reflect all known risk factors in its evaluation, judgment errors may occur.

 

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.

 

 

United Bancorp,
Inc.

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 March 31, 2021, gross loans were $450.0 million, compared to $443.5 million at
December 31, 2020, an increase of $6.5 million after offsetting repayments for the period. The overall increase in the loan portfolio
was comprised of a $4.9 million increase in commercial and commercial real estate loans and a $2.3 million increase in real estate lending
and a $644,000 decrease in installment loans since December 31, 2020.

 

Commercial and commercial real estate loans comprised 78.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of total
loans at March 31, 2021, compared to 78.8{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} at December 31, 2020. Commercial and commercial real estate loans have increased $4.9 million,
or 1.4{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} since December 31, 2020. 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.

 

Installment loans represented 1.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of total loans
at March 31, 2021 and 1.9{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} at December 31, 2020. Some of the installment loans carry somewhat more risk than real estate lending; however,
it also provides for higher yields. Installment loans have decreased $644,000, or 7.8{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, since December 31, 2020. 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 19.6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of total
loans at March 31, 2021 and 19.3{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} at December 31, 2020, representing an increase of $2.3 million, or 2.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} since December 31, 2020. At
March 31, 2021, the Company did not hold any loans for sale.

 

The allowance for loan losses totaled $4.8 million
at March 31, 2021, which represented 1.07{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of total loans, and $5.1 million at December 31, 2020, or 1.15{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} 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 loan losses is adequate to absorb probable
incurred credit losses associated with the loan portfolio. Net loan charge-offs (exclusive of overdrafts net charge-offs of $9,000) for
the three months ended March 31, 2021 were approximately $92,000. Net loans charged off increased approximately $28,000 for the three
months ended March 31, 2021 as compared to the same period in 2020.

 

  

United Bancorp,
Inc.

Management’s Discussion and Analysis of
Financial

Condition and Results of Operations

  

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 March 31, 2021 decreased approximately $11.8 million from December 31, 2020 totals.

 

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 March 31, 2021, total core deposits (interest
and non interest bearing accounts and savings) increased approximately $29.1 million, or 5.1{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} from December 31, 2020 totals. The Company’s
savings accounts increased $9.1 million or 7.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} from December 31, 2020 totals. The Company’s interest-bearing and non-interest bearing
demand deposits increased $25.7 million while certificates of deposit under $250,000 decreased by $5.7 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 March 31,
2021, certificates of deposit greater than $250,000 decreased $628,000 or 8.4{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, from December 31, 2020 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
$14.5 million from December 31, 2020 totals.

 

Results of Operations for the Three Months
Ended March 31, 2021 and 2020

 

Net Income

 

The reported diluted earnings per share was $0.33
for the quarter ended March 31, 2021 compared to $0.28 for the quarter ended March 31, 2020.

 

Net Interest Income

 

Net interest income decreased $321,000 or 5.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
for the three months ended March 31, 2021 compared to the same period in 2020. With overall interest rates at historical low the Company
will be challenged to maintain the current level of net interest income. 

 

Provision for Loan Losses

 

The provision for loan losses was a credit to
expense of $205,000 for the three months ended March 31, 2021, compared to provision expense of $563,000 for the same period in 2020.
With the overall concerns with the COVID-19 pandemic and employment metrics gaining momentum, the Company released a small portion of
its reserve related to COVID-19 during the three months ended March 31, 2021. 

 

 

United Bancorp,
Inc.

Management’s Discussion and Analysis of
Financial

Condition and Results of Operations

  

Noninterest Income

 

Noninterest income of the Company was decreased
$118,000 year-over-year. This decrease was in part due to the decrease in service charge income by $67,000.

 

Noninterest Expense

 

The Company saw its noninterest expense increase
by $39,000 or less than 1{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} year-over-year. Salary and employee benefits decreased $42,000 or 1.8{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} year over year. This decrease was offset
by an increase in Professional fees by $42,000 year over year.

 

Federal Income Taxes

 

The provision for federal income taxes was $87,000
for the three months ended March 31, 2021, a decrease of $39,000 compared to the same period in 2020. The effective tax rate was approximately
4.4{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} and 7.4{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for the three months ended March 31, 2021 and 2020, respectively.

 

COVID-19: Update on Company Action and Ongoing
Risks
  

 

In December 2019, a novel coronavirus (COVID-19)
was reported in China, and, in March 2020, the World Health Organization declared it a pandemic. On March 12, 2020, the President of the
United States declared the COVID-19 outbreak in the United States a national emergency. The COVID-19 pandemic has caused significant economic
dislocation in the United States as many state and local governments have ordered non-essential businesses to close and residents to shelter
in place at home. This has resulted in an unprecedented slow-down in economic activity and a related increase in unemployment. As a result
of the spread of COVID-19, economic uncertainties arose which can ultimately affect the financial position, results of operations and
cash flows of the Company as well as the Company’s customers. The Coronavirus Aid, Relief, and Economic Security Act passed
by Congress in March 2020 (CARES Act) included relief for individual Americans, health care workers, small businesses and certain industries
hit hard by the COVID-19 pandemic.  The Coronavirus Response and Relief Supplemental Appropriations Act, passed by Congress
in December 2020, extended certain provisions of the CARES Act affecting the Company into 2021. Key banking provisions under this legislation
include the following:

 

· An additional $284.6 billion in Paycheck Protection Program (PPP) funding for loans to small businesses,
including for borrowers who have previously received a PPP loan.

 

· A one-page simplified forgiveness process for PPP loans under $150,000.

 

· Clarification to various CARES Act provisions, the tax treatment of PPP expenses, lender responsibilities
for agent fees, and lender “hold harmless” protections under the PPP and other laws.

 

· A further delay in Troubled Debt Restructuring (TDR) accounting until 60 days after the termination of
the national emergency, or January 1, 2022.

 

· A further optional delay in Current Expected Credit Loss (CECL) accounting until January 1, 2022.

 

· A new round of Economic Impact Payments (EIPs) for consumers, with aggressive distribution timelines and
new exemptions from garnishments.

 

· Significant added support for Community Development Financial Institutions (CDFIs) and Minority Depository
Institutions (MDIs).

 

· Funding for agricultural support programs and for renter assistance programs.

 

· Termination of existing Federal Reserve emergency lending authority under the CARES Act, while preserving
the Fed’s general 13(3) emergency authority existing prior to that Act.

 

As of March 31, 2021, the Bank has $6.3 million
of outstanding loans that were modified and are paying interest only and $4.1 million of loans on total payment deferrals.

 

  

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 $66.7 million at
March 31, 2021, compared to $68.3 million at December 31, 2020, a $1.6 million decrease. Total average stockholders’ equity in relation
to total assets was 9.10{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} at March 31, 2021 and 9.85{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} at December 31, 2020. 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.

 

On January 1, 2015, the final rules of the Federal
Reserve Board went into effect implementing in the United States the Basel III regulatory capital reforms from the Basel Committee on
Banking Supervision and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

Under the final 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.

 

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

 

Common equity tier 1 capital ratio     12.49 {de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Tier 1 capital ratio     13.27 {de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Total capital ratio     18.11 {de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
Leverage ratio     9.91 {de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}

 

  

United Bancorp,
Inc.

Management’s Discussion and Analysis of
Financial

Condition and Results of Operations

 

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

 

Substantially all of the Company’s assets
and liabilities relate to banking activities and are monetary in nature. The consolidated financial statements and related financial data
are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). U.S.
GAAP currently requires the Company to measure the financial position and results of operations in terms of historical dollars, with the
exception of securities available for sale, certain impaired loans and certain other real estate and loans that may be measured at fair
value. Changes in the value of money due to rising inflation can cause purchasing power loss.

 

Management’s opinion is that movements in
interest rates affect the financial condition and results of operations to a greater degree than changes in the rate of inflation. It
should be noted that interest rates and inflation do affect each other, but do not always move in correlation with each other. The Company’s
ability to match the interest sensitivity of its financial assets to the interest sensitivity of its liabilities in its asset/liability
management may tend to minimize the effect of changes in interest rates on the Company’s performance.

 

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

 

Smaller Reporting Companies are not required to provide this disclosures.

 

  

ITEM 4. Controls and Procedures

 

The Company, under the supervision, and with the
participation, of its management, including the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness
of the design and operation of the Company’s disclosure controls and procedures 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 March 31, 2021, in timely alerting them to material information relating to the Company (including its
consolidated subsidiary) required to be included in the Company’s periodic SEC filings.

 

There was no change in the Company’s internal
control over financial reporting that occurred during the Company’s fiscal quarter ended March 31, 2021 that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

United Bancorp,
Inc.

Part II – Other Information

 

ITEM 1. Legal Proceedings

 

None, other than ordinary routine litigation incidental to the Company’s
business.

 

 

There have been no material changes from risk
factors as previously disclosed in Part 1 Item 1A of the Company’s Form 10-K for the year ended December 31, 2020, filed on March
20, 2021.

 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

ISSUER PURCHASES OF EQUITY SECURITIES

 

Period   (a)
Total Number
of
Shares (or
Units)
Purchased
  (b)
Average Price Paid
Per Share (or Unit)
  (c)
Total Number of
Shares (or Units)
Purchased as Part
Of Publicly
Announced Plans
Or Programs
  (d)

Maximum Number or
Approximate Dollar
Value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
Month #1
1/1/2021 to
1/31/2021
    ––     ––     ––     ––
Month #2
2/1/2021 to
2/28/2021
      $     ––     ––
Month #3
3/1/2021 to
3/31/2021
            ––     ––

  

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{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}
of their annual 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 a participant’s account is distributed with any cash proceeds credited to the account which have not yet been invested in the
Company’s stock. All purchases under this deferred compensation 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 have not been registered under the Securities Act of 1933 in reliance upon the exemption provided by Section 4(2) thereof.

 

ITEM 3. Defaults Upon Senior Securities

 

Not applicable.

 

 

United Bancorp,
Inc.

Part II – Other Information

 

ITEM 4. Mine Safety Disclosures

 

Not applicable.

 

 

 

  (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 Exhibit 4 to the registrant’s
Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 20, 2020.

     
  (4) 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.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  /s/ United Bancorp, Inc.
   
Date: May 7, 2021 By:    /s/ Scott A. Everson
  Scott A. Everson
  President and Chief Executive Officer
   
Date: May 7, 2021 By: /s/ Randall M. Greenwood
  Randall M. Greenwood
 

EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL AND RISK OFFICER

 

 

 

 

 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Scott A. Everson, President and Chief Executive Officer of United
Bancorp, Inc., certify that:

 

  1. I have reviewed this Form 10-Q of United Bancorp, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a)         Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;

 

(b)         Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;

 

(c)         Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and

 

(d)         Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)         All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b)         Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.

 

 

Date: May 7, 2021 /s/ Scott A. Everson
  Scott A. Everson, President and CEO

 

 

 

Exhibit 31.2

 

 

CERTIFICATIONS

 

I, Randall M. Greenwood, Chief Financial Officer of United Bancorp,
Inc., certify that:

 

  (b) I have reviewed this Form 10-Q of United Bancorp, Inc.;

 

  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (b) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (b) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (b) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 7, 2021 /s/ Randall M. Greenwood
  Randall M. Greenwood
  EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL AND RISK OFFICER

 

 

 

 

Exhibit 32.1

  

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of United
Bancorp, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2021 as filed with the Securities and Exchange Commission
on the date hereof (the “Report”), I, Scott A. Everson, President and Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. § 1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Scott A. Everson  
Scott A. Everson,  
President and Chief Executive Officer  
   
May 7, 2021  

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ENACTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of United Bancorp, Inc. (the
“Company”) on Form 10-Q for the period ending March 31, 2021 as filed with the Securities and Exchange Commission on the date
hereof (the “Report”), I, Randall M. Greenwood, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §
1350, as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

  (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

  (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ Randall M. Greenwood  
Randall M. Greenwood,  
EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL AND RISK OFFICER  
   
May 7, 2021