Profile: United Community Bancorp Inc (UCBA.O)
6 Oct 2015
United Community Bancorp, Inc., incorporated on July 17, 1981, is a savings and loan holding company. The Company is holding company for United Community Bank (the Bank), which is a federally chartered savings bank. The Bank operates as a financial institution offering a menu of banking services and products to consumers and businesses in its market areas. United Community Bank attracts deposits from the general public and local municipalities and uses those funds to originate one- to four-family real estate, multi-family real estate and nonresidential real estate, construction, commercial and consumer loans. UCB Real Estate Management Holdings, LLC is a wholly-owned subsidiary of United Community Bank. The entity was formed for the purpose of holding real estate assets that are acquired by the Bank through, or in lieu of, foreclosure. UCB Financial Services, Inc., a wholly owned subsidiary of the Bank, was formed for the purpose of collecting commissions on investments referred to Lincoln Financial Group.
The Company originates loans primarily for investment purposes. The primary lending activity is the origination of one- to four-family mortgage loans secured by homes in the local market area. A portion of this lending activity has been the origination for retention in portfolio of adjustable-rate mortgage loans collateralized by one- to four-family residential real estate located within the primary market area.
The Company offers mortgage loans to enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the owner. They offer fixed-rate and adjustable-rate loans with terms up to 30 years. The Company offers adjustable-rate mortgage loans secured by multi-family real estate. The multi-family real estate loans are generally secured by apartment buildings within and outside the primary market area.
The Company originates adjustable-rate multi-family real estate loans with terms up to 30 years. The Company’s adjustable-rate multi-family loans generally do not provide for a decrease in the rate paid below the initial contract rate. Loans are secured by first mortgages that generally do not exceed 80% of the lesser of the property’s appraised value or the purchase price. The Company also offers adjustable-rate mortgage loans secured by non-residential real estate. The Company’s non-residential real estate loans are generally secured by commercial buildings. These loans are typically repaid or the term is extended before maturity, in which case a new rate is negotiated to meet market conditions and an extension of the loan is executed for a new term with a new amortization schedule. The Company originates adjustable-rate nonresidential real estate loans with terms up to 30 years.
The Company originates fixed-rate and adjustable-rate loans to individuals and, to a lesser extent, builders to finance the construction of residential dwellings. They also make construction loans for commercial development projects, including apartment buildings, restaurants, shopping centers and owner-occupied properties used for businesses. The construction loans generally provide for the payment of interest only during the construction phase, which are usually nine months for residential properties and 12 months for commercial properties. At the end of the construction phase, the loan generally converts to a permanent mortgage loan.
The Company makes commercial business loans to professionals, sole proprietorships and small businesses in the market area. They extend commercial business loans on an unsecured basis and secured basis, the maximum amount of which is limited by in-house loans to one borrower limit. The Company originates secured and unsecured commercial lines of credit to finance the working capital needs of businesses to be repaid by seasonal cash flows. Secured commercial loans are collateralized by nonresidential real estate, marketable securities, accounts receivable, inventory, industrial and commercial machinery and equipment and furniture and fixtures.
The Company offers consumer loans, primarily home equity loans and lines of credit, and, to a much lesser extent, loans secured by savings accounts or certificates of deposit share loans, new farm and garden equipment, new and used automobiles, recreational vehicle loans and secured and unsecured personal loans. The procedures for underwriting consumer loans include an assessment of the applicant’s payment history on other debts and ability to meet existing obligations and payments on the proposed loan. Although the applicant’s creditworthiness is a primary consideration, the underwriting process also includes a comparison of the value of the collateral as well as the proposed loan amount. They offer loans secured by new and used boats, motor homes, campers and motorcycles. They also offer fixed and adjustable-rate loans for new motor homes and boats with terms up to 10 years for adjustable-rate loans and up to 10 years for fixed-rate loans. The Company offers fixed-rate loans for all other new and used recreational vehicles with terms up to 10 years for campers and five years for motorcycles.
The Company offers agricultural loans generally consisting of short and medium-term loans and lines of credit that are primarily used for crops, livestock, equipment and general operations. Agricultural loans are secured by assets such as livestock, crops or equipment and are repaid from the operations of the farm. Agricultural loans generally have maturities of five years or less, with operating lines for one production season.
The Company invests in liquid assets, including the United States Treasury obligations, securities of various federal agencies, state and municipal governments, deposits at the Federal Home Loan Bank of Indianapolis and certificates of deposit of federally insured institutions. The Company is also required to maintain an investment in Federal Home Loan Bank of Indianapolis stock.
Sources of Funds
The Company’s major sources of funds are deposits, borrowings and loan repayments for lending and other investment purposes. Loan repayments are a source of funds, while deposit inflows and outflows and loan prepayments are influenced by general interest rates and market conditions. The Company offers deposits in the market area through advertising and through website. They offer a broad selection of deposit instruments, including noninterest-bearing demand accounts such as checking accounts, interest-bearing accounts such as interest-bearing checking and money market accounts, regular savings accounts and certificates of deposit.
United Community Bancorp Inc
92 Walnut St
LAWRENCEBURG IN 47025-1836