Item 1A.Risk Factors
Smaller Reporting Companies are not required to provide this disclosure.
Item 1B.
Item 1B.Unresolved Staff Comments
None.
Item 2Properties
The Company owns and operates its Main Office and stand alone operations center in Martins Ferry, Ohio and the following offices:
Branch Office Location
Owned or Leased
Location
Owned or Leased
Bridgeport, Ohio
Owned
Sherrodsville, Ohio
Owned
Colerain, Ohio
Owned
Glouster, Ohio
Owned
Jewett, Ohio
Owned
Amesville, Ohio
Owned
St. Clairsville, Ohio
Owned
Nelsonville, Ohio
Owned
Dover, Ohio
Owned
Lancaster, Ohio
Owned
Dellroy, Ohio
Owned
Lancaster, Ohio
Owned
New Philadelphia, Ohio
Owned
Strasburg, Ohio
Owned
Tiltonsville, Ohio
Owned
Dillonvale, Ohio
Leased
St. Clairsville, Ohio
Owned
Loan Production Office
Location
Owned or Leased
Wheeling, West Virginia
Leased
Management believes the properties described above to be in good operating condition for the purpose for which they are used. The properties are unencumbered by any mortgage or security interest and are, in management’s opinion, adequately insured.
Item 3Legal Proceedings
There are no material legal proceedings, other than ordinary routine litigation incidental to its business, to which the Company or its subsidiary is a party or to which any of its property is subject.
Item 4Mine Safety Disclosures
Not applicable.
PART II
Item 5Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Refer to Page 9, “Shareholder Information” of the 2017 Annual Report To Shareholders filed herewith as Exhibit 13 and refer to Page 31, Note 1 of the Notes to the Consolidated Financial Statements of the Company in the 2017 Annual Report To Shareholders for common stock trading ranges, cash dividends declared and information relating to dividend restrictions, which information is incorporated herein by reference. Additional disclosure regarding dividend restrictions is also included under Part I, Item 1 of this 10-K in the section captioned “Supervision and Regulation.”
Unregistered Sales of Equity Securities and Use of Proceeds
ISSUER PURCHASES OF EQUITY SECURITIES
(1)All of these shares were purchased by the Company on the open market.
The Company adopted the United Bancorp, Inc. Affiliate Banks Directors and Officers Deferred Compensation Plan (the “Plan”), which is an unfunded deferred compensation plan. Amounts deferred pursuant to the Plan remain unrestricted assets of the Company, and the right to participate in the Plan is limited to members of the Board of Directors and Company officers. Under the Plan, directors or other eligible participants may defer fees and up to 50% of their annual cash incentive award payable to them by the Company, which are used to acquire common shares which are credited to a participant’s respective account. Except in the event of certain emergencies, no distributions are to be made from any account as long as the participant continues to be an employee or member of the Board of Directors. Upon termination of service, the aggregate number of shares credited to the participant’s account are distributed to him or her along with any cash proceeds credited to the account which have not yet been invested in the Company’s stock. On May 11, 2017, the Plan purchased a total of 3,626 common shares for participant accounts. 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 under the Plan have not been registered under the Securities Act of 1933 in reliance upon the exemption provided by Section 4(a)(2) thereof.
Item 6Selected Consolidated Financial Data
Refer to inside front cover, “Decade of Progress” of the 2017 Annual Report To Shareholders filed herewith as Exhibit 13, which financial information is incorporated herein by reference.
Item 7Management’s Discussion and Analysis of Financial Condition and Results of Operations
Refer to Pages 10-22, “Management’s Discussion and Analysis” of the 2017 Annual Report To Shareholders filed herewith as Exhibit 13, which section is incorporated herein by reference.
Critical Accounting Policy
The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and follow general practices within the financial services industry. The application of these principles requires management to make certain estimates, assumptions and judgements that affect the amounts reported in the financial statements and footnotes. These estimates, assumptions and judgements are based on information available as of the date of the financial statements, and as this information changes, the financial statements could reflect different estimates, assumptions, and judgements.
The procedures for assessing the adequacy of the allowance for loan losses reflect our evaluations of credit risk after careful consideration of all information available to management. In developing this assessment, management must rely on estimates and exercise judgement regarding matters where the ultimate outcome is unknown such as economic factors, development affecting companies in specific industries and issues with respect to single borrowers. Depending on changes in circumstances, future assessments of credit risk may yield materially different results, which may require an increase or a decrease in the allowance for loan losses.
The allowance is regularly reviewed by management to determine whether the amount is considered adequate to absorb probable losses. This evaluation includes specific loss estimates on certain individually reviewed loans, statistical losses, estimates for loan pools that are based on historical loss experience, and general loss estimates that are based on the size, quality and concentration characteristics of the various loan portfolios, adverse situations that may affect a borrower’s ability to repay, and current economic and industry conditions. Also considered as part of that judgement is a review of the Bank’s trends in delinquencies and loan losses, and economic factors.
The allowance for loan losses is maintained at a level believed adequate by management to absorb probable losses inherent in the loan portfolio. Management’s evaluation of the adequacy of the allowance is an estimate based on management’s current judgement about the credit quality of the loan portfolio. While the Company strives to reflect all known risk factors in its evaluation, judgement errors may occur.
Item 7AQuantitative and Qualitative Disclosures About Market Risk
Refer to Page 16-17 “Asset/Liability Management and Sensitivity to Market Risks” of the 2017 Annual Report to Shareholders filed herewith as Exhibit 13, which section is incorporated herein by reference
Item 8Financial Statements and Supplementary Data
Refer to the Report of the Company’s Independent Registered Public Accounting Firm and the related audited financial statements and notes thereto contained in the 2017 Annual Report To Shareholders filed herewith as Exhibit 13, which items are incorporated herein by reference.
Item 9Changes In and Disagreements with Accountants
Not applicable.
Item 9AControls and Procedures
The Company, under the supervision, and with the participation, of its management and its outsourced internal audit firm Greenestock Consulting LLC, including the Company's principal executive and principal financial officers, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as of December 31, 2017, pursuant to the requirements of Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of December 31, 2017, in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic SEC filings.
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Under the supervision and with the participation of management, including our principal executive and principal financial officers, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, as required by paragraph (c) of Exchange Act Rule13a-15. Based on the evaluation under Internal Control - Integrated Framework, management concluded that the Company’s internal control over financial reporting was effective as of December 31,2017. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm.
There was no change in the Company's internal control over financial reporting that occurred during the Company's fiscal quarter ended December 31, 2017 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
Item 9BOther Information
None.
PART III
Item 10Directors and Executive Officers of the Registrant
Information concerning executive officers of the Company is set forth in Part I, “Supplemental Item - Executive Officers of Registrant.” Other information responding to this Item 10