$13.98
$25.30
bear $13.98
base $20.80
bull $25.30
margin of safety $9.00
market price* $13.40
United Bancorp is the holding company for Unified Bank of Martins Ferry, Ohio, a community bank with a main office and eighteen branches across eastern, southeastern and south central Ohio and the northern panhandle of West Virginia (Wheeling and Moundsville). About 80% of its loans are commercial, including commercial real estate, and most of the rest are home mortgages. At the end of 2025 it had $857 million of assets, $487 million of net loans, $641 million of deposits (about half in demand accounts) and $70.5 million of equity, or roughly $12.10 of tangible book value per share. Loans are only about 76% of deposits. The $234 million securities portfolio earns $7.7 million a year of tax-exempt municipal interest, which is why 2025 net income ($7.75 million) was slightly above pre-tax income ($7.67 million). Interest on deposits and borrowings (including $75 million of Federal Home Loan Bank advances and $23.9 million of subordinated debentures) is the raw material of a bank and is already charged in its earnings, so we subtract no separate debt in any case. How we measured earnings. We count what owners could take out after the costs of staying in business: cash from operations, less working-capital swings, less stock compensation, less ordinary capital spending. Per share that was $1.51 in 2019, $1.31 in 2020, $1.29 in 2021, $1.60 in 2022 and $1.67 in 2023. We anchor on the median of those five years, $1.51; 2019 is the first full year after the fourth-quarter 2018 acquisition of Powhatan Point Community Bancshares. 2024 and 2025 are set aside because the bank spent $9.7 million and $11.8 million on premises (about $1 million is typical) to build the Wheeling, West Virginia banking center, which opened December 9, 2025, and to acquire and renovate the Unified Center operations building in St. Clairsville. Restated with ordinary capital spending of about $0.75 million, earnings were about $1.29 in 2024 and $1.46 in 2025. Loan-loss provisions are added back inside cash from operations (the 2020 pandemic provision was $3.3 million); the bear case charges credit losses explicitly instead. The Unified Center renovation, targeted for the end of the first quarter of 2026 in the annual letter and mid-2026 in the outlook section, took another $3.2 million of premises spending in the first half of 2026; we deduct $0.56 per share for that from every case. Growth. On the restated basis earnings rose about 13% in 2025 (from about $1.29 to about $1.46) and net income rose 4.7%, but reported earnings per share have fallen from $1.62 in 2021 to $1.34 in 2025 as costs rose faster than revenue. The base case starts at $1.45, the 2025 level rounded down and below the five-year median, and assumes 0% growth in year 1, below the trailing rate. No growth is credited in the base case: the Wheeling center, the mortgage division and treasury management are new and unproven earners, and nothing is contracted. First-half 2026 net income was $4.0 million against $3.8 million a year earlier (up 5.8%), which supports holding the level but not raising it. Base case, $20.80 per share. Earnings of $1.45 a year held flat for 25 years (worth $18.54 today), plus the bank's tangible equity of about $12.10 per share returned at the end of year 25 ($2.82 today), less the $0.56 2026 spending. Twenty-five years is as far as the branch franchise and deposit base can be defended from the record; beyond that we credit only the hard assets. Left out: market share gains, margin expansion, fee growth and any takeover premium. Bear case, $13.98 per share. A repeat of the 2008-2010 credit cycle, when U.S. banks' charge-offs peaked around 2.5% of loans a year. With about $500 million of loans mostly in commercial lending, we assume charge-offs of 1.0%, 1.5%, 1.5% and 1.0% of loans over four years starting in 2028, $25 million in all. The $4.3 million allowance and about $2 million of ordinary provisions already in earnings absorb part, leaving about $18.7 million before tax, $14.8 million after tax, or $2.57 per share, spread 20%, 35%, 35% and 10% across those years. Cash earnings before credit costs fall 15% in those four years from interest lost on troubled loans and tighter margins, leaving $0.58, $0.20, $0.20 and $0.84 per share in years 2 to 5. Earnings start at $1.29 (the 2024 level, as cost pressure continues), recover to about $1.25 after the cycle, then drift down 3% a year for ten years (reported per-share earnings fell 4.6% a year from 2021 to 2025) to about $0.95 and stay flat to year 25, after which tangible equity is returned. The bank stays profitable in every year and its $70.5 million of equity absorbs the losses without raising capital. The value exceeds tangible book because even in this case the bank earns roughly 8% to 11% a year on tangible equity, funded by low-cost local deposits. Bull case, $25.30 per share. Earnings return to the 2023 level of $1.67 and grow 2% a year in years 2 to 10, the pace reported earnings per share compounded from 2019 to 2025 ($1.19 to $1.34), as the Wheeling center, mortgage division and treasury management add loans and deposits. Growth uses capital, so we deduct the 2% of tangible equity retained each year. Earnings reach about $2.00 in year 10 with tangible equity of about $14.47 per share, then stay flat to year 25 with tangible equity returned. What could make this wrong. Credit losses worse than the bear case, which is the main risk with a loan book 80% commercial; a continued rise in salaries and technology costs; and the tax-exempt municipal income that supports net income. Two items we could not reconcile from the filings: other liabilities rose $6.8 million in 2025 while the cash-flow statement attributes only $0.9 million to operations, and first-half 2026 cash from operations was $1.3 million against $4.8 million a year earlier, with a $1.9 million swing in accrued interest. We treat both as timing or building-related, not as a change in earning power. Earlier estimates for this company used a different measure of earnings and are not comparable. The margin-of-safety price: $9.00 per share. We are reasonably sure of the earnings level: $1.29 to $1.67 per share in each year since 2019 on a like-for-like basis, though it has drifted down since 2023 and we give no credit for the new initiatives. The worst plausible outcome is a commercial real estate credit cycle like the bear case, plus possible outcomes no case models, such as a deposit run, a regulatory action, a large operational loss or a change in the tax treatment of municipal interest. The structure should survive: loans are 76% of deposits and equity is $70.5 million. If we are wrong about the earnings level and it settles at $1.29 and never recovers, the shares are still worth about $18.75, and if the credit cycle arrives, about $13.98. The shares are thinly traded, and the price assumes a holding period of three years or more. The bank paid $0.92 per share in dividends in 2025, about 10% a year on $9.00. From $9.00, a return only to tangible book value of $12.10 in three years implies about 18% a year including dividends, and reaching the bear-case value implies about 23%. That is why the margin-of-safety price is no higher than $9.00.