10-Q

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           September 30, 2012          

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)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). x Yes    ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer,” and “small reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller Reporting Company x

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 November 9, 2012, 5,372,147 shares of the Company’s common stock, $1.00 par value, were issued and outstanding.

PART I - FINANCIAL INFORMATION
Item 1  Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Income	4
Condensed Consolidated Statements of Comprehensive Income	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	8
Item 2  Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3  Quantitative and Qualitative Disclosures About Market Risk	43
Item 4  Controls and Procedures	43
PART II - OTHER INFORMATION
Item 1  Legal Proceedings	44
Item 1A  Risk Factors	44
Item 2  Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3  Defaults Upon Senior Securities	44
Item 4  Other Information	45
Item 5  Exhibits	45
SIGNATURES	46

2

ITEM 1.  Financial Statements

United Bancorp, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

	September 30,			December 31,
	2012			2011
	(Unaudited)
Assets
Cash and due from banks	$	4,933		$	4,764
Interest-bearing demand deposits		97,303			10,917
Cash and cash equivalents		102,236			15,681
Available-for-sale securities		38,600			81,998
Held-to-maturity securities		3,511			4,450
Loans, net of allowance for loan losses of $2,773 and $2,921 at September 30, 2012 and December 31, 2011, respectively		283,549			281,526
Premises and equipment		10,453			9,804
Federal Home Loan Bank stock		4,810			4,810
Foreclosed assets held for sale, net		1,958			2,046
Intangible assets		334			424
Accrued interest receivable		1,191			1,410
Deferred income taxes		958			909
Bank-owned life insurance		10,954			10,672
Other assets		1,762			1,836
Total assets	$	460,316		$	415,566
Liabilities and Stockholders’ Equity
Liabilities
Deposits
Demand	$	195,402		$	142,021
Savings		66,551			57,907
Time		108,031			128,612
Total deposits		369,984			328,540
Short-term borrowings		13,706			9,968
Federal Home Loan Bank advances		32,625			32,951
Subordinated debentures		4,000			4,000
Interest payable and other liabilities		3,480			3,925
Total liabilities		423,795			379,384
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 2012 –5,375,304 shares, 2011 – 5,360,304 shares		5,375			5,360
Additional paid-in capital		17,573			17,391
Retained earnings		18,464			18,399
Stock held by deferred compensation plan; 2012 – 201,663 shares, 2011 – 197,111 shares		(1,913	)		(1,856	)
Unearned ESOP compensation		(1,925	)		(2,081	)
Accumulated other comprehensive loss		(1,015	)		(920	)
Treasury stock, at cost 2012 –3,157 shares, 2011 – 9,150 shares		(38	)		(111	)
Total stockholders’ equity		36,521			36,182
Total liabilities and stockholders’ equity	$	460,316		$	415,566

See Notes to Condensed Consolidated Financial Statements

3

United Bancorp, Inc.

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	Three months ended					Nine months ended
	September 30,					September 30,
	2012		2011			2012			2011
Interest and dividend income
Loans, including fees	$	4,158	$	4,415		$	12,537		$	13,194
Taxable securities		151		356			605			1,113
Non-taxable securities		146		247			501			831
Federal funds sold		23		4			51			15
Dividends on Federal Home Loan Bank stock and other		70		49			175			168
Total interest and dividend income		4,548		5,071			13,869			15,321
Interest expense
Deposits
Demand		28		27			89			92
Savings		18		15			53			49
Time		512		698			1,660			2,143
Borrowings		394		401			1,176			1,333
Total interest expense		952		1,141			2,978			3,617
Net interest income		3,596		3,930			10,891			11,704
Provision for loan losses		268		401			769			1,543
Net interest income after provision for loan losses		3,328		3,529			10,122			10,161
Noninterest income
Service charges on deposit accounts		500		559			1,516			1,582
Realized gains on sales of securities		—		––			—			370
Realized gains on sales of loans		5		33			14			76
Realized losses on sales of other real estate and repossessed assets		—		(5	)		(6	)		(10	)
BOLI benefit in excess of surrender value		—		––			—			100
Other income		218		245			616			673
Total noninterest income		723		832			2,140			2,791
Noninterest expense
Salaries and employee benefits		1,713		1,632			5,035			5,103
Occupancy and equipment		477		458			1,372			1,341
Professional services		197		262			545			690
Insurance		69		73			193			200
FDIC insurance		73		33			215			240
Franchise and other taxes		123		129			377			373
Advertising		160		61			316			184
Stationery and office supplies		61		75			173			175
Amortization of intangibles		29		29			89			89
Provision for losses on foreclosed real estate		26		––			78			49
Other expenses		554		548			1,503			1,623
Total noninterest expense		3,482		3,300			9,896			10,067
Income before federal income taxes		569		1,061			2,366			2,885
Federal income taxes		118		260			423			594
Net income	$	451	$	801		$	1,943		$	2,291
EARNINGS PER COMMON SHARE
Basic	$	0.09	$	0.16		$	0.39		$	0.47
Diluted	$	0.09	$	0.16		$	0.39		$	0.46
DIVIDENDS PER COMMON SHARE	$	0.07	$	0.14		$	0.37		$	0.42

See Notes to Condensed Consolidated Financial Statements 

4

United Bancorp, Inc.

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three months ended						Nine months ended
	September 30,						September 30,
	2012			2011			2012			2011
Net income	$	451		$	801		$	1,943		$	2,291
Other comprehensive income (loss), net of tax:
Unrealized holding (losses) gains on securities during the period, net of taxes of ($21), $45, ($49) and $335 for each respective period		(40	)		87			(95	)		651
Reclassification adjustment for realized gains included in income, net of taxes of $126 for the nine month period ended September 30, 2011					––			—			(244	)
Comprehensive income	$	411		$	888		$	1,848		$	2,698
Accumulated comprehensive loss	$	(1,015	)	$	(300	)	$	(1,015	)	$	(300	)

See Notes to Condensed Consolidated Financial Statements

5

United Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine months ended
	September 30,
	2012			2011
Operating Activities
Net income	$	1,943		$	2,291
Items not requiring (providing) cash
Depreciation and amortization		705			725
Amortization of intangible asset		89			89
Expense related to share based compensation plans		159			160
Provision for loan losses		769			1,543
Provision for losses on foreclosed real estate		78			49
Increase in value of bank-owned life insurance		(282	)		(182	)
Realized gains on sales of securities		—			(370	)
Amortization of premiums (discounts) on securities, net		(50	)		(71	)
Originations of loans held for sale		(771	)		(4,805	)
Proceeds from sale of loans held for sale		785			4,881
Realized gains on sales of loans		(14	)		(76	)
Amortization of ESOP		157			132
Realized losses on sales of other real estate and repossessed assets		6			10
Amortization of mortgage servicing rights		43			23
Net change in accrued interest receivable and other assets		219			(68	)
Net change in accrued expenses and other liabilities		(431	)		(336	)
Net cash provided by operating activities		3,405			3,995
Investing Activities
Securities available for sale:
Maturities, prepayments and calls		92,246			70,587
Purchases		(48,957	)		(64,644	)
Securities held to maturity:
Maturities, prepayments and calls		955			1,495
Proceeds from sale of held-to-maturity securities		—			302
Proceeds from sale of available for sale securities		—			8,886
Net change in loans		(3,239	)		(1,832	)
Net change in certificates of deposit in other financial institutions		—			2,564
Purchases of premises and equipment		(1,355	)		(1,421	)
Proceeds from disposal of premises and equipment		—			35
Proceeds from sale of other real estate and repossessed assets		467			183
Net cash provided by investing activities		40,117			16,155

See Notes to Condensed Consolidated Financial Statements

6

United Bancorp, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(In thousands)

(Unaudited)

	Nine months ended
	September 30,
	2012			2011
Financing Activities
Net change in deposits	$	41,444		$	(1,767	)
Net change in short-term borrowings		3,738			2,092
Net change in long-term borrowings		(325	)		(10,396	)
Shares purchased for deferred compensation plan		53			72
Proceeds from purchase of shares by Dividend Reinvestment Plan		—			236
Cash dividends paid on common stock		(1,877	)		(2,238	)
Net cash provided by (used in) financing activities		43,033			(12,001	)
Increase in Cash and Cash Equivalents		86,555			8,149
Cash and Cash Equivalents, Beginning of Period		15,681			10,935
Cash and Cash Equivalents, End of Period	$	102,236		$	19,084
Supplemental Cash Flows Information
Interest paid on deposits and borrowings	$	3,015		$	3,722
Federal income taxes paid	$	485		$	765
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Transfers from loans to foreclosed assets held for sale	$	462		$	545

See Notes to Condensed Consolidated Financial Statements

7

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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 September 30, 2012, 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, 2011 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 and nine months ended September 30, 2012, 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, 2011 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, The Citizens Savings Bank of Martins Ferry, Ohio (“the Bank” or “Citizens”). The Bank operates two divisions, The Community Bank, a division of The Citizens Savings Bank and The Citizens Bank, a division of The Citizens Savings 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, Hocking, Jefferson, and Tuscarawas Counties and the surrounding localities in northeastern, east-central and southeastern Ohio, and include a wide range of individuals, businesses and other organizations. The Citizens Bank division conducts its business through its main office in Martins Ferry, Ohio and twelve branches in Bridgeport, Colerain, Dellroy, Dillonvale, Dover, Jewett, New Philadelphia, St. Clairsville East, St. Clairsville West, Sherrodsville, Strasburg, and Tiltonsville, Ohio. The Community Bank division conducts its business through its main office in Lancaster, Ohio and seven offices in Amesville, Glouster, Lancaster, and Nelsonville, Ohio. 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 and are not considered “sub prime” type loans. The targeted lending areas of our Bank operations encompass four separate metropolitan areas, minimizing the risk to changes in economic conditions in the communities housing the Company’s 20 branch locations.

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.

8

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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.

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.

9

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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 uncollectibility 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 three years. Management believes the three 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.

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.

10

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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% -35% 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.

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.

11

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

Earnings Per Share

Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the period, less shares in the ESOP which are unallocated and not committed to be released and non-vested restricted stock. At September 30, 2012 and 2011, the ESOP held 194,988 and 218,627 unallocated shares, respectively, which were not included in weighted-average common shares outstanding. In addition at September 30, 2012 and 2011, the Company has 175,000 and 170,000 shares, respectively, of non vested restricted stock, which were not included in weighted-average common shares outstanding. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under the Company’s stock compensation plans.

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Basic
Net income (In thousands)	$	451		$	801		$	1,943		$	2,291
Dividends on non-vested restricted stock (In thousands)		(12	)		(24	)		(62	)		(71	)
Net earnings allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding		4,784,815			4,775,728			4,778,577			4,760,297
Basic earnings per common share	$	0.09		$	0.16		$	0.39		$	0.47
Diluted
Net income allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding for basic earnings per common share		4,784,815			4,775,728			4,778,577			4,760,297
Add: Dilutive effects of assumed exercise of stock options and restricted stock		69,826			46,432			70,602			40,253
Average shares and dilutive potential common shares		4,854,641			4,822,160			4,849,179			4,800,550
Diluted earnings per common share	$	0.09		$	0.16		$	0.39		$	0.46

Options to purchase 53,714 shares of common stock at a weighted-average exercise price of $10.34 per share were outstanding at both September 30, 2012 and 2011, but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares.

12

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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 2010.

Recent Accounting Pronouncements

FASB ASU 2011-03, Transfers and Servicing (Topic 860), Reconsideration of Effective Control for Repurchase Agreements, issued in April 2011, improves the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The updated guidance is effective for the first interim or annual period beginning on or after December 15, 2011 and should be applied prospectively. The Company adopted FASB ASU 2011-03 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-04, Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements, issued in May 2011, provides guidance in common fair value measurement and disclosure requirements. The amendment changes the wording used to describe many of the requirements for measuring fair value and for disclosing information about fair value measurements. The amendments are effective during interim and annual periods beginning after December 15, 2011. The Company adopted FASB ASU 2011-04 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-05, Comprehensive Income (Topic 220), Presentation of Comprehensive Income, issued in June 2011, is designed to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in comprehensive income. The amendments are effective during interim and annual periods beginning after December 15, 2011. The Company adopted FASB ASU 2011-05 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-08, Intangibles (Topic 350), Testing Goodwill for Impairment, issued in September 2011, is designed to simplify how entities, both public and nonpublic, test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test in Topic 350. The amendments are effective during interim and annual periods beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company adopted FASB ASU 2011-08 as required, without a material effect on the Company’s financial condition or results of operations.

13

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

FASB ASU 2011-12, Comprehensive Income (Topic 220), Deferral of the effective Date for Amendments to the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-12, issued in December 2011 is a deferral of only those changes in update 2011-05 that relates to the presentation of reclassification adjustments out of accumulated other comprehensive income. All other requirements in Update 2011-05 are not affected by this update, including the requirements to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted FASB ASU 2011-12 as required, without a material effect on the Company’s financial condition or results of operations.

Note 2: Securities

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
September 30, 2012
U.S. government agencies	$	26,976	$	94	$	(7	)	$	27,063
State and political subdivisions		11,020		497					11,517
Equity securities		4		16		—			20
	$	38,000	$	607	$	(7	)	$	38,600
Available-for-sale Securities:
December 31, 2011:
U.S. government agencies	$	64,077	$	98	$	(7	)	$	64,168
State and political subdivisions		17,173		652		(8	)		17,817
Equity securities		4		9		––			13
	$	81,254	$	759	$	(15	)	$	81,998

14

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Held-to-maturity Securities:
September 30, 2012:
State and political subdivisions	$	3,511	$	76	$	—	$	3,587
December 31, 2011:
State and political subdivisions	$	4,450	$	147	$	––	$	4,597

The amortized cost and fair value of available-for-sale securities and held-to-maturity securities at September 30, 2012, 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.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	675	$	679	$	749	$	755
One to five years		2,419		2,522		1,785		1,848
Five to ten years		10,925		11,318		977		984
After ten years		23,977		24,061		—		—
		37,996		38,580		3,511		3,587
Equity securities		4		20		—		—
Totals	$	38,000	$	38,600	$	3,511	$	3,587

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $30.5 million and $58.2 million at September 30, 2012 and December 31, 2011, respectively.

15

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Information with respect to sales of securities and resulting gross realized gains and losses was as follows:

	Nine months ended September 30
	2012		2011
	(In thousands)
Proceeds from sale	$	—	$	9,188
Gross gains		—		370
Gross losses		—		––

During the nine months ended September 30, 2011 the Company sold one security with an amortized cost of $295,000 resulting in a realized gain of approximately $7,000 and is included in the table above under gross gains. This security was classified on the books as “held to maturity” and was sold due to a credit quality down grade of the municipality issuer.

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 September 30, 2012 and December 31, 2011, was $2.9 million and $6.3 million, which represented approximately 7% and 7%, respectively, of the Company’s available-for-sale and held-to-maturity investment portfolio.

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.

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 September 30, 2012 and December 31, 2011:

September 30, 2012
	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	$	2,993	$	(7	)	$	—	$	—	$	2,993	$	(7	)

16

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

December 31, 2011
	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	$	5,992	$	(7	)	$	––	$	––	$	5,992	$	(7	)
State and political subdivisions		332		(8	)		––		––		332		(8	)
Total temporarily impaired securities	$	6,324	$	(15	)	$	––	$	––	$	6,324	$	(15	)

The unrealized losses on the Company’s investments in U.S. Government agency and municipal 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 September 30, 2012 and December 31, 2011.

Note 3: Loans and Allowance for Loan Losses

Categories of loans include:

	September 30,			December 31,
	2012			2011
	(In thousands)
Commercial loans	$	39,206		$	35,387
Commercial real estate		142,781			148,052
Residential real estate		70,834			61,765
Installment loans		33,501			39,243
Total gross loans		286,322			284,447
Less allowance for loan losses		(2,773	)		(2,921	)
Total loans	$	283,549		$	281,526

17

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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.

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 and Consumer

Residential 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.

18

United Bancorp, Inc.
Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

Allowance for Loan Losses and Recorded Investment in Loans

As of and for the three and nine month periods ended September 30, 2012

	Commercial			Commercial Real Estate			Installment			Residential			Unallocated			Total
	(In thousands)
Allowance for loan losses:
Balance, July 1, 2012	$	418		$	1,622		$	226		$	99		$	284		$	2,649
Provision charged to expense		46			168			43			67			(56	)		268
Losses charged off		(67	)		(49	)		(86	)		(55	)		––			(257	)
Recoveries		83			7			22			1			––			113
Balance, September 30, 2012	$	480		$	1,748		$	205		$	112		$	228		$	2,773
Balance, January 1, 2012	$	183		$	2,321		$	235		$	95		$	87		$	2,921
Provision charged to expense		275			222			33			98			141			769
Losses charged off		(67	)		(804	)		(206	)		(84	)		––			(1,161	)
Recoveries		89			9			143			3			––			244
Balance, September 30, 2012	$	480		$	1,784		$	205		$	112		$	228		$	2,773
Allowance:
Ending balance:  individually evaluated for impairment	$	409		$	1,193		$	––		$	––		$	––		$	1,602
Ending balance: collectively evaluated for impairment	$	71		$	555		$	205		$	112		$	228		$	1,171
Loans:
Ending balance:  individually evaluated for impairment	$	1,068		$	7,057		$	––		$	––		$	––		$	8,125
Ending balance:  collectively evaluated for impairment	$	38,138		$	135,724		$	33,501		$	70,834		$	––		$	278,197

19

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

Allowance for Loan Losses

for the three and nine month periods ended September 30, 2011

	Commercial			Commercial Real Estate			Installment			Residential			Unallocated		Total
	(In thousands)
Allowance for loan losses:
Balance, July 1, 2011	$	159		$	1,967		$	227		$	77		$	353	$	2,783
Provision charged to expense		264			(136	)		65			32			176		401
Losses charged off		(1	)		(23	)		(96	)		(54	)		––		(174	)
Recoveries		17			7			22			5			––		51
Balance, September 30, 2011	$	439		$	1,815		$	218		$	60		$	529	$	3,061
Balance, January 1, 2011	$	561		$	1,566		$	229		$	140		$	244	$	2,740
Provision charged to expense		300			676			200			82			285		1,543
Losses charged off		(444	)		(450	)		(393	)		(169	)		––		(1,456	)
Recoveries		22			23			182			7			––		234
Balance, September 30, 2011	$	439		$	1,815		$	218		$	60		$	529	$	3,061

20

United Bancorp, Inc. 

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

Allowance for Loan Losses and Recorded Investment in Loans

As of December 31, 2011

	Commercial		Commercial Real Estate		Installment		Residential		Unallocated		Total
	(In thousands)
Allowance for loan losses:
Ending balance:  individually evaluated for impairment	$	59	$	1,799	$	––	$	––	$	––	$	1,858
Ending balance:  collectively evaluated for impairment	$	124	$	522	$	235	$	95	$	87	$	1,063
Loans:
Ending balance:  individually evaluated for impairment	$	637	$	8,254	$	––	$	––	$	––	$	8,891
Ending balance:  collectively evaluated for impairment	$	34,750	$	139,798	$	39,243	$	61,765	$	––	$	275,556

The following tables show the portfolio quality indicators.

	September 30, 2012
Loan Class	Commercial		Commercial Real Estate		Residential		Installment		Total
	(In thousands)
Pass Grade	$	35,360	$	130,792	$	70,834	$	33,423	$	270,409
Special Mention		2,725		3,603		––		3		6,331
Substandard		1,121		8,009		––		75		9,205
Doubtful		––		377		––		––		377
	$	39,206	$	142,781	$	70,834	$	33,501	$	286,322

	December 31, 2011
Loan Class	Commercial		Commercial Real Estate		Residential		Installment		Total
	(In thousands)
Pass Grade	$	31,320	$	133,949	$	61,590	$	39,161	$	266,020
Special Mention		2,930		3,500		175		5		6,610
Substandard		882		6,924		––		77		7,883
Doubtful		255		3,679		––		––		3,934
	$	35,387	$	148,052	$	61,765	$	39,243	$	284,447

21

United Bancorp, Inc. 

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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.

Loan Portfolio Aging Analysis

As of September 30, 2012

	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	$	22	$	––	$	81	$	613	$	716	$	38,490	$	39,206
Commercial real estate		103		––		377		1,434		1,914		140,867		142,781
Installment		117		88		––		94		299		70,535		70,834
Residential		748		396		––		1,419		2,563		30,938		33,501
Total	$	990	$	484	$	458	$	3,560	$	5,492	$	280,830	$	286,322

22

United Bancorp, Inc. 

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

Loan Portfolio Aging Analysis

As of December 31, 2011

	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	$	661	$	21	$	80	$	240	$	1,002	$	34,385	$	35,387
Commercial real estate		485		––		––		2,677		3,162		144,890		148,052
Installment		405		53		5		71		534		38,709		39,243
Residential		1,038		81		––		1,867		2,986		58,779		61,765
Total	$	2,589	$	155	$	85	$	4,855	$	7,684	$	276,763	$	284,447

Impaired Loans

	As of September 30, 2012						For the three months ended September 30, 2012				For the nine months ended September 30, 2012
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Commercial	$	364	$	364	$	––	$	393	$	5	$	445	$	23
Commercial real estate		3,312		4,067		––		2,160		78		2,404		164
Residential		––		––		––		19		––		19		––
		3,676		4,431		––		2,572		83		2,868		187
Loans with a specific valuation allowance:
Commercial		704		704		409		664		––		545		11
Commercial real estate		3,745		3,745		1,193		4,362		8		4,651		107
Residential		––		––		––		40		––		40		––
		4,450		4,449		1,602		5,066		8		5,236		118
Total:
Commercial	$	1,068	$	1,068	$	409	$	1,057	$	5	$	990	$	34
Commercial real estate	$	7,057	$	7,812	$	1,193	$	6,522	$	86	$	7,055	$	271
Residential	$	––	$	––	$	––	$	59	$	––	$	59	$	––

23

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

Impaired Loans

	As of December 31, 2011						Three Months Ended September 30, 2011				Nine Months Ended September 30, 2011
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Commercial	$	532	$	532	$	––	$	404	$	—	$	427	$	2
Commercial real estate		1,805		1,805		––		1,211		13		1,212		38
Residential		––		––		––		41		––		41		––
		2,337		2,337		––		1,656		13		1,680		40
Loans with a specific valuation allowance:
Commercial		105		105		59		361		3		316		9
Commercial  real estate		6,449		6,449		1,799		4,240		9		4,017		65
Residential		––		––		––		111		––		74		––
Residential		––		––		––		10		2		31		––
		6,554		6,554		1,858		4,722		14		4,438		76
Total:
Commercial	$	637	$	637	$	59	$	765	$	3	$	743	$	11
Commercial real estate	$	8,254	$	8,254	$	1,799	$	5,451	$	22	$	5,229	$	103
Residential	$	––	$	––	$	––	$	152	$	––	$	115	$	––
Installment	$	––	$	––	$	––	$	10	$	2	$	31	$	2

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

24

United Bancorp, Inc.

 Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

During the three and nine month periods ended September 30, 2012 and 2011, for the TDRs noted in the table 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 table 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 September 30, 2012
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		3	$	152	$	66
Commercial real estate		––		––		––
Residential		––		––		––
Installment		––		––		––

	Three Months ended September 30, 2011
	Number of Contracts	Pre- Modification Outstanding  Recorded Investment	Post-Modification Outstanding  Recorded Investment
	(In thousands)
Commercial	––	––	––
Commercial real estate	––	––	––
Residential	––	––	––
Installment	––	––	––

	Nine Months ended September 30, 2012
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		3	$	152	$	66
Commercial real estate		2		74		16
Residential		––		––		––
Installment		––		––		––

25

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

	Nine Months ended September 30, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		6	$	108	$	107
Commercial real estate		6		536		536
Residential		––		––		––
Installment		––		––		––

At September 30, 2012 and 2011 and for the nine and three months periods ended, 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.

Note 4: Benefit Plans

Pension expense includes the following:

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
	(In thousands)
Service cost	$	89		$	76		$	267		$	228
Interest cost		45			43			135			129
Expected return on assets		(57	)		(60	)		(171	)		(180	)
Amortization of prior service cost and net loss		43			20			129			60
Pension expense	$	120		$	79		$	360		$	237

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.

26

United Bancorp, Inc.

 Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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

	September 30,		December 31,
	2012		2011
	(In thousands)
Commitments to extend credit	$	33,699	$	30,028
Commitment to originate loans		14,837		11,000
Overdraft program and ready reserve lines		13,562		11,115
Standby letters of credit		666		962

Note 6: Accumulated Other Comprehensive Loss

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

	September 30,  2012			December 31, 2011
	(In thousands)
Net unrealized gain on securities available-for-sale	$	600		$	744
Net unrealized loss for unfunded status of defined benefit plan liability		(2,139	)		(2,137	)
		(1,539	)		(1,393	)
Tax effect		524			473
Net-of-tax amount	$	(1,015	)	$	(920	)

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

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

27

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

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. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. The Company has no securities classified as Level 3 of the 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 September 30, 2012 and December 31, 2011:

			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)
September 30, 2012
U.S. government agencies	$	27,063	$	––	$	27,063	$	––
State and political subdivisions		11,517		––		11,517		––
Equity securities		20		20		––		––
December 31, 2011
U.S. government agencies	$	64,168	$	––	$	64,168	$	––
State and political subdivisions		17,817		––		17,817		––
Equity securities		13		13		––		––

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.

28

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

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 Senior Vice President Chief Lending’s Office. Appraisals are reviewed for accuracy and consistency by the Senior Vice President Chief Lending’s Office. 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 Senior Vice President Chief Lending’s Office 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 Senior Vice President Chief Lending’s Office. Appraisals are reviewed for accuracy and consistency by the Senior Vice President, Chief Lending’s Officer and are selected from the list of approved appraisers maintained by management.

29

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

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 September 30, 2012 and December 31, 2011.

			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)
September 30, 2012
Impaired loans	$	2,743	$	––	$	––	$	2,743
Foreclosed assets held for sale		736		––		––		736
December 31, 2011
Impaired loans	$	1,756	$	––	$	––	$	1,746
Foreclosed assets held for sale		415		––		––		415

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 9/30/12		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
	(In thousands)
Foreclosed assets held for sale	$	736	Market comparable properties	Comparability adjustments	Not available
Collateral-dependent impaired loans		2,743	Market comparable properties	Marketability discount	10% – 35%

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. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. 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.

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United Bancorp, Inc.

 Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2012 and 2011

			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)
September 30, 2012
Financial assets
Cash and cash equivalents	$	102,236	$	102,236	$	––	$	––
Held-to-maturity securities		3,511		––		3,587		––
Loan, net of allowance		283,549		––		––		282,488
Federal Home Loan Bank stock		4,810		––		4,810		––
Accrued interest receivable		1,191		––		1,191		––
Financial liabilities
Deposits		369,984		––		350,465		––
Short term borrowings		13,706		––		13,706		––
Federal Home Loan Bank Advances		32,625		––		36,066		––
Subordinated debentures		4,000		––		3,691		––
Interest payable		197		––		197		––

31

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

The classification of the assets and liabilities pursuant to the valuation hierarchy as of December 31, 2011 in the following table have not been audited. The fair value has been derived from the December 31, 2011 audited consolidated financial statements.

			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, 2011:
Financial assets
Cash and cash equivalents	$	15,681	$	15,681	$	—	$	—
Held-to-maturity securities		4,450		––		4,597		––
Loans, net of allowance		281,526		—		––		283,055
Federal Home Loan Bank stock		4,810		––		4,810		––
Accrued interest receivable		1,410		––		1,410		––
Financial liabilities
Deposits		328,540		––		313,817		––
Short term borrowings		9,968		––		9,995		––
Federal Home Loan Bank Advances		32,951		––		35,617		––
Subordinated debentures		4,000		––		3,632		––
Interest payable		234		––		234		––

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.

32

United Bancorp, Inc.

Notes to Condensed Consolidated Financial Statements 

For the Three and Nine Months Ended September 30, 2012 and 2011

Held-to-maturity Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated 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. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 2 of the hierarchy. The Company has no securities classified as Level 3 of the hierarchy.

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.

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 September 30, 2012 and December 31, 2011.

33

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 September 30, 2012, as compared to December 31, 2011, and the results of operations for the three and nine months ended September 30, 2012, compared to the same periods in 2011. This discussion should be read in conjunction with the interim condensed consolidated financial statements and related footnotes included herein.

Introduction

The Company’s earnings for the nine months ended September 30, 2012 generated an annualized 0.61% return on average assets (“ROA”) and a 7.10% return on average equity (“ROE”) compared to 0.72% ROA and 8.39% ROE for the nine months ended September 30, 2011. Comparing the nine months ended September 30, 2012 to 2011, the Company’s net interest margin was 3.90% compared to 4.25%, a decrease of 35 basis points. This decrease in the margin resulted in an $815,000 drop in net interest income. Implementation of the government mandated regulations from the Dodd-Frank Act regarding our Courtesy Overdraft Program caused a reduction in customer service fees of approximately $169,000. This was offset by an increase in other service fees which resulted in a net reduction of $66,000 in service fee income for the nine months ended September 30, 2012. During this same period, the Company did not have the substantial gains that it had the previous year resulting from receiving a $100,000 BOLI benefit in excess of is surrender value and by recognizing a gain on sale of securities of $370,000 through liquidating its government sponsored mortgage–backed securities portfolio to take advantage of the favorable rate environment on these short term investments. The Company’s 2012 earnings were positively impacted by a period over period decrease of $775,000 in its provision for loan losses. This decrease in the provision for loan losses is directly attributed to the overall improvement in the credit quality of the loan portfolio. Net loans of $916,000 were charged off during the nine months ended September 30, 2012, a decrease of $305,000 from the prior year period. A single out of area loan relationship accounted for $755,000 of the net loan amount charged off. Excluding this individual loan loss, net loans charged off for the current nine month period were $161,000. Other real estate owned decreased $256,000 from September 30, 2011 to September 30, 2012 and nonaccrual loans to total loans decreased by 29 basis points or $702,000, going from 1.53% in 2011 to 1.24%. These improving trends relating to credit quality are very positive considering that the present level of nonaccrual loans to total loans is nearly half of that of our peer group. Another area trending in a positive direction is core funding. Total deposits increased $46.3 million from December 31, 2011 to September 30, 2012 with most of this growth occurring in low cost funding.As a result of the booming activity of the oil and gas industry within our market areas, the Company has experienced a higher than normal influx of funds. Some of these funds may be temporary in nature and it is projected that a portion of these funds will flow back out of the Company within the next three to six months. These deposit fluctuations are closely monitored and are incorporated into our monthly asset/liability and funds management strategy. Also, in order to capitalize on its opportunities, the Company has implemented a marketing strategy within the past three months focusing on attracting a larger percentage of low cost funding at each of its banking locations, while continuing to allow higher cost term funding to flow out. This will help lower the cost of funding in future periods. The Company has a significant present liquid position in cash-type investments which can be invested in future periods in higher yielding investments. Each of these opportunities has the potential to lead to higher levels of profitability.

34

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

What we are seeing at present is the culmination of the monetary and regulatory burdens that have been placed upon the Company over the course of the last few years. Our weak economic recovery, the continuation of a zero rate monetary policy and the cumulative impact of the regulatory policies reducing our fee income opportunities and increasing our compliance expense collectively have led to our earnings performance being significantly impacted within these past nine months. The Federal Reserve’s explicit extension of its quest to keep interest rates at exceedingly low levels for the next three years may further erode our interest margin as higher yielding securities are called or mature and are replaced with lower yieldinginvestment opportunities in this lackluster economy. Not wanting to take undue interest rate risk, we are keeping our liquidity in short term low yielding funds as Cash and due from Bank which has increased during the past nine months 552% to $102 million. With a 25 basis point return, this has impacted our third quarter earnings. Until we have a clearer vision of our government’s direction, we are being careful at this point in time not to take a lot of interest rate risk by stretching maturities for higher yields. Our original budget forecast did not anticipate the continuation of this zero-based monetary policy. On this basis, we continued to reward our shareholders with a high yielding dividend payment until this past quarter when we reduced our cash dividend payment by 50%. This action was taken with much consideration after it became apparent there would not be a normalization of interest rates as originally anticipated due to continuing changes in the policy of the Federal Reserve. At this moment the Company is not taking market risk by extending investment maturities for return until we gain a better understanding of our economy’s direction. For now we continue to aggressively and selectively make loans in the markets that we serve and consider this to be our only prudent and viable opportunity to generate an acceptable yield on our funds. We are pleased to report that gross loans are up $1.9 million, or 0.67%, during the past nine months with continued improvement in the credit quality of our loan portfolio

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 cause actual results to differ materially from historical earnings and those presently anticipated or projected. Factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any statements expressed with respect to future periods.

The Company is not aware of any trends, events or uncertainties that will have or are reasonably likely to have a material effect on its financial condition, results of operations, liquidity or capital resources except as discussed herein. The Company is not aware of any current recommendation by regulatory authorities that would have such effect if implemented except as discussed herein.

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

Current Economic Conditions

The current protracted economic decline continues to present financial institutions with circumstances and challenges which in some cases have resulted in large declines in the fair values of investments and other assets, constraints on liquidity and significant credit quality problems, including severe volatility in the valuation of real estate and other collateral supporting loans. The consolidated financial statements have been prepared using values and information currently available to the Company.

Given the volatility of current economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the allowance for loan losses and capital that could negatively impact the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity.

35

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Critical Accounting Policies

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.

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 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.

Analysis of Financial Condition

Earning Assets – Loans

Our focus as a community bank is to meet the credit needs of the markets we serve. At September 30, 2012, gross loans were $286.3 million, compared to $284.4 million at December 31, 2011, an increase of $1.9 million. The overall increase in the loan portfolio was comprised of a $9.1 million increase in residential real estate loans, which were partially offset by a $5.7 million decrease in installment lending and a $1.5 million decrease in commercial and commercial real estate loans since December 31, 2011.

Commercial and commercial real estate loans comprised 63.4% of total loans at September 30, 2012, compared to 64.5% at December 31, 2011. Commercial and commercial real estate loans have decreased $1.5 million, or less than 1% since December 31, 2011. This segment of the loan portfolio includes originated loans in our 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, but all within the state of Ohio.

36

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Installment loans represented 11.7% of total loans at September 30, 2012 and 13.8% at December 31, 2011. Some of the installment loans are an indirect lending type of financing that carries somewhat more risk than real estate lending; however, it also provides for higher yields. Installment loans have decreased $5.7 million, or 14.6%, since December 31, 2011. The targeted lending areas encompass four separate metropolitan areas, minimizing the risk to changes in economic conditions in the communities housing the Company’s 20 banking locations. Indirect installment loans are approximately 71.9% and 74.8% of the installment loan portfolio as of September 30, 2012 and December 31, 2011, respectively.

Residential real estate loans were 24.7% of total loans at September 30, 2012 and 21.7% at December 31, 2011, representing an increase of $9.1 million since December 31, 2011. As of September 30, 2012, the Bank has approximately $15.4 million in fixed-rate loans that have been sold in the secondary market but still serviced by the Company as compared to $20.8 million at December 31, 2011. The level of fixed rate mortgages serviced by the Company will continue to decline as the Company will not retain servicing rights on new sales going forward for these types of products. The Company will continue to service these loans for a fee that is typically 25 basis points. At September 30, 2012, the Company did not hold any loans for sale.

The allowance for loan losses totaled $2.8 million at September 30, 2012, which represented 0.97% of total loans, and $2.9 million at December 31, 2011, or 1.03% 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 charge-offs for the nine months ended September 30, 2012 were approximately $917,000 or 31.4%, of the beginning balance in the allowance for loan losses. Net loans charged off did decrease for the nine months ended September 30, 2012 as compared to the same period in 2011. The decrease in the provision for loan losses was primarily due to overall improvement in the credit quality of the loan portfolio. Net loans charged off decreased approximately $305,000 for the nine months ended September 30, 2012 as compared to the same period in 2011. One out of area loan relationship accounted for $755,000 of the net loans charged off during the nine months ended September 30, 2012. Other real estate owned decreased $88,000 from December 31, 2011 to September 30, 2012. Nonaccrual loans to total loans decreased by 29 basis points, going from 1.52% in 2011 to 1.24% for the same period in 2012.

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 and held-to-maturity at September 30, 2012 decreased approximately $44.3 million from December 31, 2011 totals. With the overall low interest rate environment, the Company has experienced a high level of called bond activity during the first nine months of 2012. The opportunities to reinvest these funds have been limited due to the historical low interest rates available on replacement investments.

37

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Sources of Funds – Deposits

The Company’s primary source of funds is core deposits from retail and business customers. These core deposits include all categories of interest-bearing and noninterest-bearing deposits, excluding certificates of deposit greater than $100,000. For the period ended September 30, 2012, total core deposits increased approximately $50.1 million, or 17.3%. The Company’s savings accounts increased $8.6 million, or 14.9%, from December 31, 2011 totals. The Company’s interest-bearing and non-interest bearing demand deposits increased $53.4 million, while certificates of deposit under $100,000 decreased by $12.0 million, or 13.4%. As a result of the booming activity of the oil and gas industry within our market areas, the Company has experienced a higher than normal influx of funds. Some of these funds may be temporary in nature and it is projected that a portion of these funds will flow back out of the Company within the next three to six months.

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 $100,000 are not considered part of core deposits and as such are used to balance rate sensitivity as a tool of funds management. At September 30, 2012, certificates of deposit greater than $100,000 decreased $8.6 million or 21.8%, from December 31, 2011 totals.

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

Other interest-bearing liabilities include securities sold under agreements to repurchase, sweep accounts, Treasury, Tax and Loan notes payable 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 short-term borrowings increased approximately $3.7 million from December 31, 2011 totals.

Results of Operations for the Nine Months Ended September 30, 2012 and 2011

Net Income

The net earnings of Company were $1,943,000 for the nine months ended September 30, 2012, compared to $2,291,000 for the nine months ended September 30, 2011. On a per share basis, the Company’s diluted earnings were $0.39 for the nine months ended September 30, 2012, as compared to $0.46 for the nine months ended September 30, 2011.

Net Interest Income

Net interest income, by definition, is the difference between interest income generated on interest-earning assets and the interest expense incurred on interest-bearing liabilities. Various factors contribute to changes in net interest income, including volumes, interest rates and the composition or mix of interest-earning assets in relation to interest-bearing liabilities. Net interest income decreased 6.9%, or $813,000, for the nine months ended September 30, 2012 compared to the same period in 2011.

Provision for Loan Losses

The provision for loan losses was $769,000 for the nine months ended September 30, 2012, compared to $1.5 million for the same period in 2011. As previously discussed, the decrease in the provision for loan losses was primarily due to overall improvement in the credit quality of the loan portfolio.

38

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Noninterest Income

Total noninterest income is made up of bank related fees and service charges, as well as other income producing services provided, sales of loans in the secondary market, ATM income, early redemption penalties for certificates of deposit, safe deposit rental income, internet bank service fees, earnings on bank-owned life insurance and other miscellaneous items.

Noninterest income for the nine months ended September 30, 2012 was $2,140,000 a decrease of $651,000 or 23.3%, compared to $2,791,000 for the nine-month period ended September 30, 2011. A component of customer service fees are charges related to the Company’s courtesy overdraft program. As the Company has implemented government mandated regulations from the Dodd-Frank Act regarding its courtesy overdraft program, the Company has seen a reduction in customer service fees of approximately $159,000 for the nine months ended September 30, 2012 as compared to the same period in 2011. During the nine months ended September 30, 2012 the Company did not sell any securities. In 2011, the Company sold its government sponsored mortgage–backed securities portfolio to take advantage of the favorable rate environment on these short term investments and provide liquidity to restructure the Company’s balance sheet. As a result1, the Company recognized a gain on sale of securities of $370,000 for the nine months ended September 30, 2011 and the Company received a $100,000 BOLI benefit in excess of surrender value.

Noninterest Expense

Noninterest expense was $9.9 million for the nine months ended September 30, 2012 a decrease of $171,000, or 1.7%, compared to the nine months ended September 30, 2011. Salaries and employee benefit expense decreased $68,000, or 1.3%, for the period ended September 30, 2012 compared to the same period in 2011. Professional fees decreased $145,000 for the nine month ended September 30, 2012, as compared to the same period in 2011 as a result of the decreased levels of foreclosed assets. Advertising expense increased $132,000 for the nine months ended September 30, 2012 compared to the same period in 2011. Beginning in 2012 the Company now utilizes a direct marketing firm as a part of a customer acquisition strategy over traditional methods of advertising. Deposit insurance premiums decreased $25,000 for the nine months ended September 30, 2012, as compared to the same period in 2011. During the nine months ended September 30, 2012, the Company also recorded a $78,000 impairment on the value of certain repossessed properties.

Federal Income Taxes

The provision for federal income taxes was $423,000 for the nine months ended September 30, 2012, a decrease of $171,000 compared to the same period in 2011. The effective tax rate was 17.9% and 20.6% for the nine months ended September 30, 2012 and 2011, respectively. During the nine months ended September 30, 2012, the Company recognized a tax benefit resulting from the resolution of a tax contingency, which reduced federal income taxes by approximately $110,000.

Results of Operations for the Three Months Ended September 30, 2012 and 2011

Net Income

For the three months ended September 30, 2012 the Company reported net earnings of $451,000, compared to $801,000 for the three months ended September 30, 2011. On a per share basis, the Company’s diluted earnings were $0.09 for the three months ended September 30, 2012, as compared to $0.16 for the three months ended September 30, 2011.

39

United Bancorp, Inc.

Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Net Interest Income

Net interest income, by definition, is the difference between interest income generated on interest-earning assets and the interest expense incurred on interest-bearing liabilities. Various factors contribute to changes in net interest income, including volumes, interest rates and the composition or mix of interest-earning assets in relation to interest-bearing liabilities. Net interest income decreased 8.5%, or $334,000 for the three months ended September 30, 2012 compared to the same period in 2011. Not wanting to take undue interest rate risk, we are keeping our liquidity in short term low yielding funds as Cash and due from Bank which has increased during the past nine months 552% to $102 million. With a 25 basis point return, this has impacted our third quarter earnings. Until we have a clearer vision of our government’s direction, we are being careful at this point in time not to take a lot of interest rate risk by stretching maturities for higher yields. Our original budget forecast did not anticipate the continuation of this zero-based monetary policy.

Provision for Loan Losses

The provision for loan losses was $268,000 for the three months ended September 30, 2012, compared to $401,000 for the same period in 2011. As previously discussed, the decrease in the provision for loan losses was primarily due to overall improvement in the credit quality of the loan portfolio.

Noninterest Income

Total noninterest income is made up of bank related fees and service charges, as well as other income producing services provided, sales of loans in the secondary market, ATM income, early redemption penalties for certificates of deposit, safe deposit rental income, internet bank service fees, earnings on bank-owned life insurance and other miscellaneous items.

Noninterest income for the three months ended September 30, 2012 was $723,000, a decrease of $109,000, or 13.1%, compared to $832,000 for the three-month period ended September 30, 2011. A component of customer service fees are charges related to the Company’s courtesy overdraft program. As the Company has implemented government mandated regulations from the Dodd-Frank Act regarding its courtesy overdraft program, the Company has seen a reduction in customer service fees of approximately $54,000 for the three months ended September 30, 2012 as compared to the same period in 2011.

Noninterest Expense

Noninterest expense was $3.5 million for the three months ended September 30, 2012 an increase of $182,000, compared to the three months ended September 30, 2011. Salaries and employee benefit expense increased $81,000, or 5.0%, for the three month period ended September 30, 2012, compared to the same period in 2011. This increase was primarily due to the Company’s increase in health care costs which renews July 1^st of each year. Professional fees decreased $65,000 for the three month ended September 30, 2012, as compared to the same period in 2011 as a result of the decreased levels of foreclosed assets. Deposit insurance premiums decreased $40,000 for the three months ended September 30, 2012, as compared to the same period in 2011. The Company also recorded a $26,000 impairment on the value of certain repossessed properties.

Federal Income Taxes

The provision for federal income taxes was $118,000 for the three months ended September 30, 2012, a decrease of $142,000 compared to the same period in 2011. The effective tax rate was 20.7% and 24.5% for the three months ended September 30, 2012 and 2011, respectively.

40

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 $36.5 million at September 30, 2012 compared to $36.2 million at December 31, 2011, a $339,000 increase. Total average stockholders’ equity in relation to total average assets was 8.59% at September 30, 2012 and 8.52% at December 31, 2011. In 2001, our shareholders approved an amendment to the Company’s Articles of Incorporation to create a class of preferred shares with 2,000,000 authorized shares. This enables the Company, at the option of the Board of Directors, to issue series of preferred shares in a manner calculated to take advantage of financing techniques which may provide a lower effective cost of capital to the Company. The amendment also provides greater flexibility to the Board of Directors in structuring the terms of equity securities that may be issued by the Company. Although this preferred stock is a financial tool, it has not been utilized to date.

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

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

The minimums related to such capital requirements are:

	Total			Tier 1			Tier 1
	Capital To			Capital To			Capital To
	Risk-Weighted			Risk-Weighted			Average
	Assets			Assets			Assets
Well capitalized		10.00	%		6.00	%		5.00	%
Adequately capitalized		8.00	%		4.00	%		4.00	%
Undercapitalized		6.00	%		3.00	%		3.00	%

The following table illustrates the Company’s “well-capitalized” classification at September 30, 2012.

	September 30,
	2012
	(Dollars in thousands)
Tier 1 capital	$	39,777
Total risk-based capital		42,557
Risk-weighted assets		290,848
Average total assets		426,617
Total risk-based capital ratio		14.63	%
Tier 1 risk-based capital ratio		13.68	%
Tier 1 capital to average assets		9.32	%

41

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.

42

United Bancorp, Inc.

 Management’s Discussion and Analysis of Financial

 Condition and Results of Operations

ITEM 3          Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change from disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

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 September 30, 2012, 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 September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

43

United Bancorp, Inc.

 Part II – Other Information

ITEM 1.          Legal Proceedings

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

ITEM 1A.        Risk Factors

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, 2011, filed on March 23, 2012.

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 7/1/2012 to 7/31/2012		––		––		––		––
Month #2 8/1/2012 to 8/31/2012		––		––		––		––
Month #3 9/1/2012 to 9/30/2012		––		––		––		––

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 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 March 16, 2012, the Plan purchased a total of 5,993 common shares for participant accounts. All purchases under this deferred compensation plan are funded with either earned director fees or officer incentive award payments which amounted to approximately $52,798. 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.

44

United Bancorp, Inc.

Part II – Other Information

ITEM 4.          Mine Safety Disclosures

Not applicable.

ITEM 5.          Exhibits

EX-3.1	Amended Articles of Incorporation of United Bancorp, Inc. (1)
EX-3.2	Amended Code of Regulations of United Bancorp, Inc. (2)
EX-4.0	Instruments Defining the Rights of Security Holders (See Exhibits 3.1 and 3.2)
EX 31.1	Rule 13a-14(a) Certification – CEO
EX 31.2	Rule 13a-14(a) Certification – CFO
EX 32.1	Section 1350 Certification – CEO
EX 32.2	Section 1350 Certification – CFO
EX 101 **	The following material from United Bancorp’s Form 10-Q Report for the quarterly period ended September 30, 2012, formatted in XBRL: (1) Unaudited Condensed Consolidated Balance Sheets, (2) Unaudited Condensed Consolidated Statements of Income, (3) Unaudited Condensed Consolidated Statements of Comprehensive Income (4) Unaudited Condensed Consolidated Statement of Changes in Shareholders’ Equity, (5) Unaudited Condensed Consolidated Statements of Cash Flows, and (6) the Notes to Unaudited Condensed Consolidated Financial Statements.

⁽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 Appendix C to the registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001.

** Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934, and are otherwise not subject to liability under these sections..

45

United Bancorp, Inc.

Part II – Other Information

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:	November 13, 2012	By:	/s/James W. Everson
			James W. Everson
			Chairman, President and Chief Executive Officer

Date:	November 13, 2012	By:	/s/Randall M. Greenwood
			Randall M. Greenwood
			Senior Vice President, Chief Financial Officer and Treasurer

46

United Bancorp, Inc.

Part II – Other Information

Exhibit Index

Exhibit No.	Description
3.1	Amended Articles of Incorporation of United Bancorp, Inc. incorporated by reference to Appendix B to the registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001.
3.2	Amended Code of Regulations of United Bancorp, Inc. incorporated by reference to Appendix C to the registrant’s Definitive Proxy Statement filed with the Securities and Exchange Commission on March 14, 2001.
4.0	Instruments Defining the Rights of Security Holders (See Exhibits 3.1 and 3.2)
31.1	Rule 13a-14(a) Certification – Principal Executive Officer
31.2	Rule 13a-14(a) Certification – Principal Financial Officer
32.1	Certification pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of The Sarbanes-Oxley act of 2002.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, James W. Everson, Chairman, 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: November 13, 2012	/s/James W. Everson
	James W. Everson, Chairman, President and CEO

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Randall M. Greenwood, Chief Financial 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: November 13, 2012	/s/Randall M. Greenwood
	Randall M. Greenwood, CFO

EX-32.1

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 September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James W. Everson, Chairman, 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/James W. Everson

James W. Everson,

Chairman, President and Chief Executive Officer

November 13, 2012

EX-32.2

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 September 30, 2011 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,

Chief Financial Officer

November 13, 2012

XML

Fair Value Measurements of Assets Recognized in Consolidated Balance Sheets Measured at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring, USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value of asset, recurring basis	$ 27,063	$ 64,168
State and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value of asset, recurring basis	11,517	17,817
Equity securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value of asset, recurring basis	20	13
Fair Value, Inputs, Level 1 | Equity securities
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value of asset, recurring basis	20	13
Fair Value, Inputs, Level 2 | U.S. government agencies
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value of asset, recurring basis	27,063	64,168
Fair Value, Inputs, Level 2 | State and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Fair value of asset, recurring basis	$ 11,517	$ 17,817

XML

Loan Portfolio Aging Analysis (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due and Accruing	$ 990	$ 2,589
60-89 Days Past Due and Accruing	484	155
Greater Than 90 Days and Accruing	458	85
Non Accrual	3,560	4,855
Total Past Due and Non Accrual	5,492	7,684
Current	280,830	276,763
Total gross loans	286,322	284,447
Commercial
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due and Accruing	22	661
60-89 Days Past Due and Accruing		21
Greater Than 90 Days and Accruing	81	80
Non Accrual	613	240
Total Past Due and Non Accrual	716	1,002
Current	38,490	34,385
Total gross loans	39,206	35,387
Commercial Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due and Accruing	103	485
60-89 Days Past Due and Accruing
Greater Than 90 Days and Accruing	377
Non Accrual	1,434	2,677
Total Past Due and Non Accrual	1,914	3,162
Current	140,867	144,890
Total gross loans	142,781	148,052
Installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due and Accruing	117	405
60-89 Days Past Due and Accruing	88	53
Greater Than 90 Days and Accruing		5
Non Accrual	94	71
Total Past Due and Non Accrual	299	534
Current	70,535	38,709
Total gross loans	70,834	39,243
Residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due and Accruing	748	1,038
60-89 Days Past Due and Accruing	396	81
Greater Than 90 Days and Accruing
Non Accrual	1,419	1,867
Total Past Due and Non Accrual	2,563	2,986
Current	30,938	58,779
Total gross loans	$ 33,501	$ 61,765

XML

Amortized Cost and Approximate Fair Values, Together with Gross Unrealized Gains and Losses of Securities (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Gain (Loss) on Investments [Line Items]
Available-for-sale Securities, Amortized Cost	$ 38,000	$ 81,254
Available-for-sale Securities, Gross Unrealized Gains	607	759
Available-for-sale Securities, Gross Unrealized Losses	(7)	(15)
Available-for-sale Securities, Approximate Fair Value	38,600	81,998
Held-to-maturity Securities, Amortized Cost	3,511	4,450
Held-to-maturity Securities, Approximate Fair Value	3,587	4,597
U.S. government agencies
Gain (Loss) on Investments [Line Items]
Available-for-sale Securities, Amortized Cost	26,976	64,077
Available-for-sale Securities, Gross Unrealized Gains	94	98
Available-for-sale Securities, Gross Unrealized Losses	(7)	(7)
Available-for-sale Securities, Approximate Fair Value	27,063	64,168
State and political subdivisions
Gain (Loss) on Investments [Line Items]
Available-for-sale Securities, Amortized Cost	11,020	17,173
Available-for-sale Securities, Gross Unrealized Gains	497	652
Available-for-sale Securities, Gross Unrealized Losses		(8)
Available-for-sale Securities, Approximate Fair Value	11,517	17,817
Held-to-maturity Securities, Amortized Cost	3,511	4,450
Held-to-maturity Securities, Gross Unrealized Gains	76	147
Held-to-maturity Securities, Gross Unrealized Losses
Held-to-maturity Securities, Approximate Fair Value	3,587	4,597
Equity Securities
Gain (Loss) on Investments [Line Items]
Available-for-sale Securities, Amortized Cost	4	4
Available-for-sale Securities, Gross Unrealized Gains	16	9
Available-for-sale Securities, Approximate Fair Value	$ 20	$ 13

XML

Estimated Fair Values of Company's Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Financial assets, Carrying Amount
Cash and cash equivalents	$ 102,236	$ 15,681	$ 19,084	$ 10,935
Held-to-maturity securities	3,511	4,450
Loans, net of allowance	283,549	281,526
Federal Home Loan Bank stock	4,810	4,810
Accrued interest receivable	1,191	1,410
Financial liabilities, Carrying Amount
Deposits	369,984	328,540
Short term borrowings	13,706	9,968
Federal Home Loan Bank advances	32,625	32,951
Subordinated debentures	4,000	4,000
Interest payable	197	234
Financial assets, Fair Value
Held-to-maturity securities	3,587	4,597
Fair Value, Inputs, Level 1
Financial assets, Fair Value
Cash and cash equivalents	102,236	15,681
Fair Value, Inputs, Level 2
Financial assets, Fair Value
Held-to-maturity securities	3,587	4,597
Federal Home Loan Bank stock	4,810	4,810
Accrued interest receivable	1,191	1,410
Financial liabilities, Fair Value
Deposits	350,465	313,817
Short term borrowings	13,706	9,995
Federal Home Loan Bank Advances	36,066	35,617
Subordinated debentures	3,691	3,632
Interest payable	197	234
Fair Value, Inputs, Level 3
Financial assets, Fair Value
Loan, net of allowance	$ 282,488	$ 283,055

XML

Notional or Contractual Amounts Of Financial Statement with Off-Balance-Sheet Risk (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Commitments to extend credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Notional or contractual amounts of financial instruments with off-balance-sheet risk	$ 33,699	$ 30,028
Commitment to originate loans
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Notional or contractual amounts of financial instruments with off-balance-sheet risk	14,837	11,000
Overdraft program and ready reserve lines
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Notional or contractual amounts of financial instruments with off-balance-sheet risk	13,562	11,115
Standby letters of credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Notional or contractual amounts of financial instruments with off-balance-sheet risk	$ 666	$ 962

XML

Securities

9 Months Ended

Sep. 30, 2012

Trading Securities [Abstract]

Securities

Note 2: Securities

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
September 30, 2012
U.S. government agencies	$	26,976	$	94	$	(7	)	$	27,063
State and political subdivisions		11,020		497					11,517
Equity securities		4		16		—			20
	$	38,000	$	607	$	(7	)	$	38,600
Available-for-sale Securities:
December 31, 2011:
U.S. government agencies	$	64,077	$	98	$	(7	)	$	64,168
State and political subdivisions		17,173		652		(8	)		17,817
Equity securities		4		9		––			13
	$	81,254	$	759	$	(15	)	$	81,998

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Held-to-maturity Securities:
September 30, 2012:
State and political subdivisions	$	3,511	$	76	$	—	$	3,587
December 31, 2011:
State and political subdivisions	$	4,450	$	147	$	––	$	4,597

The amortized cost and fair value of available-for-sale securities and held-to-maturity securities at September 30, 2012, 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.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	675	$	679	$	749	$	755
One to five years		2,419		2,522		1,785		1,848
Five to ten years		10,925		11,318		977		984
After ten years		23,977		24,061		—		—
		37,996		38,580		3,511		3,587
Equity securities		4		20		—		—
Totals	$	38,000	$	38,600	$	3,511	$	3,587

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $30.5 million and $58.2 million at September 30, 2012 and December 31, 2011, respectively.

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Information with respect to sales of securities and resulting gross realized gains and losses was as follows:

	Nine months ended September 30
	2012		2011
	(In thousands)
Proceeds from sale	$	—	$	9,188
Gross gains		—		370
Gross losses		—		––

During the nine months ended September 30, 2011 the Company sold one security with an amortized cost of $295,000 resulting in a realized gain of approximately $7,000 and is included in the table above under gross gains. This security was classified on the books as “held to maturity” and was sold due to a credit quality down grade of the municipality issuer.

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 September 30, 2012 and December 31, 2011, was $2.9 million and $6.3 million, which represented approximately 7% and 7%, respectively, of the Company’s available-for-sale and held-to-maturity investment portfolio.

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.

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 September 30, 2012 and December 31, 2011:

September 30, 2012
	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	$	2,993	$	(7	)	$	—	$	—	$	2,993	$	(7	)

December 31, 2011
	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	$	5,992	$	(7	)	$	––	$	––	$	5,992	$	(7	)
State and political subdivisions		332		(8	)		––		––		332		(8	)
Total temporarily impaired securities	$	6,324	$	(15	)	$	––	$	––	$	6,324	$	(15	)

The unrealized losses on the Company’s investments in U.S. Government agency and municipal 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 September 30, 2012 and December 31, 2011.

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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 (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Gain (Loss) on Investments [Line Items]
Less than 12 Months Fair Value		$ 6,324
Less than 12 Months Unrealized Losses		(15)
12 Months or More Fair Value
12 Months or More Unrealized Losses
Total Fair Value		6,324
Total Unrealized Losses		(15)
U.S. government agencies
Gain (Loss) on Investments [Line Items]
Less than 12 Months Fair Value	2,993	5,992
Less than 12 Months Unrealized Losses	(7)	(7)
12 Months or More Fair Value
12 Months or More Unrealized Losses
Total Fair Value	2,993	5,992
Total Unrealized Losses	(7)	(7)
State and political subdivisions
Gain (Loss) on Investments [Line Items]
Less than 12 Months Fair Value		332
Less than 12 Months Unrealized Losses		(8)
12 Months or More Fair Value
12 Months or More Unrealized Losses
Total Fair Value		332
Total Unrealized Losses		$ (8)

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Information with Respect to Sales of Securities and Resulting Gross Realized Gains and Losses - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Schedule of Available-for-sale Securities [Line Items]
Proceeds from sale		$ 9,188
Gross gains		370
Gross losses

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Categories of Loan (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Dec. 31, 2010
Accounts Notes And Loans Receivable [Line Items]
Commercial loans	$ 39,206		$ 35,387
Commercial real estate	142,781		148,052
Residential real estate	70,834		61,765
Installment loans	33,501		39,243
Total gross loans	286,322		284,447
Less allowance for loan losses	(2,773)	(2,649)	(2,921)	(3,061)	(2,783)	(2,740)
Total loans	$ 283,549		$ 281,526

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Allowance for Loan Losses and Recorded Investment in Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Mar. 31, 2011
Allowance For Loan And Lease Losses [Roll Forward]
Beginning Balance	$ 2,649	$ 2,783	$ 2,921	$ 2,740
Provision charged to expense	268	401	769	1,543
Losses charged off	(257)	(174)	(1,161)	(1,456)
Recoveries	113	51	244	234
Ending Balance	2,773	3,061	2,773	3,061
Allowance for loan losses:
Ending balance: individually evaluated for impairment	1,602		1,602		1,858
Ending balance: collectively evaluated for impairment	1,171		1,171		1,063
Loans:
Ending balance: individually evaluated for impairment	8,125		8,125		8,891
Ending balance: collectively evaluated for impairment	278,197		278,197		275,556
Commercial
Allowance For Loan And Lease Losses [Roll Forward]
Beginning Balance	418	159	183	561		370
Provision charged to expense	46	264	275	300
Losses charged off	(67)	(1)	(67)	(444)
Recoveries	83	17	89	22
Ending Balance	480	439	480	439		370
Allowance for loan losses:
Ending balance: individually evaluated for impairment	409		409		59
Ending balance: collectively evaluated for impairment	71		71		124
Loans:
Ending balance: individually evaluated for impairment	1,068		1,068		637
Ending balance: collectively evaluated for impairment	38,138		38,138		34,750
Commercial Real Estate
Allowance For Loan And Lease Losses [Roll Forward]
Beginning Balance	1,622	1,967	2,321	1,566
Provision charged to expense	168	(136)	222	676
Losses charged off	(49)	(23)	(804)	(450)
Recoveries	7	7	9	23
Ending Balance	1,784	1,815	1,784	1,815
Allowance for loan losses:
Ending balance: individually evaluated for impairment	1,193		1,193		1,799
Ending balance: collectively evaluated for impairment	555		555		522
Loans:
Ending balance: individually evaluated for impairment	7,057		7,057		8,254
Ending balance: collectively evaluated for impairment	135,724		135,724		139,798
Installment
Allowance For Loan And Lease Losses [Roll Forward]
Beginning Balance	226	227	235	229
Provision charged to expense	43	65	33	200
Losses charged off	(86)	(96)	(206)	(393)
Recoveries	22	22	143	182
Ending Balance	205	218	205	218
Allowance for loan losses:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	205		205		235
Loans:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	33,501		33,501		39,243
Residential
Allowance For Loan And Lease Losses [Roll Forward]
Beginning Balance	99	77	95	140
Provision charged to expense	67	32	98	82
Losses charged off	(55)	(54)	(84)	(169)
Recoveries	1	5	3	7
Ending Balance	112	60	112	60
Allowance for loan losses:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	112		112		95
Loans:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	70,834		70,834		61,765
Unallocated
Allowance For Loan And Lease Losses [Roll Forward]
Beginning Balance	284	353	87	244
Provision charged to expense	(56)	176	141	285
Losses charged off
Recoveries
Ending Balance	228	529	228	529
Allowance for loan losses:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	228		228		87
Loans:
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

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 September 30, 2012, 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, 2011 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 and nine months ended September 30, 2012, 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, 2011 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, The Citizens Savings Bank of Martins Ferry, Ohio (“the Bank” or “Citizens”). The Bank operates two divisions, The Community Bank, a division of The Citizens Savings Bank and The Citizens Bank, a division of The Citizens Savings 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, Hocking, Jefferson, and Tuscarawas Counties and the surrounding localities in northeastern, east-central and southeastern Ohio, and include a wide range of individuals, businesses and other organizations. The Citizens Bank division conducts its business through its main office in Martins Ferry, Ohio and twelve branches in Bridgeport, Colerain, Dellroy, Dillonvale, Dover, Jewett, New Philadelphia, St. Clairsville East, St. Clairsville West, Sherrodsville, Strasburg, and Tiltonsville, Ohio. The Community Bank division conducts its business through its main office in Lancaster, Ohio and seven offices in Amesville, Glouster, Lancaster, and Nelsonville, Ohio. 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 and are not considered “sub prime” type loans. The targeted lending areas of our Bank operations encompass four separate metropolitan areas, minimizing the risk to changes in economic conditions in the communities housing the Company’s 20 branch locations.

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.

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.

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.

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 uncollectibility 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 three years. Management believes the three 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.

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% -35% 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.

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

Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the period, less shares in the ESOP which are unallocated and not committed to be released and non-vested restricted stock. At September 30, 2012 and 2011, the ESOP held 194,988 and 218,627 unallocated shares, respectively, which were not included in weighted-average common shares outstanding. In addition at September 30, 2012 and 2011, the Company has 175,000 and 170,000 shares, respectively, of non vested restricted stock, which were not included in weighted-average common shares outstanding. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under the Company’s stock compensation plans.

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Basic
Net income (In thousands)	$	451		$	801		$	1,943		$	2,291
Dividends on non-vested restricted stock (In thousands)		(12	)		(24	)		(62	)		(71	)
Net earnings allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding		4,784,815			4,775,728			4,778,577			4,760,297
Basic earnings per common share	$	0.09		$	0.16		$	0.39		$	0.47
Diluted
Net income allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding for basic earnings per common share		4,784,815			4,775,728			4,778,577			4,760,297
Add: Dilutive effects of assumed exercise of stock options and restricted stock		69,826			46,432			70,602			40,253
Average shares and dilutive potential common shares		4,854,641			4,822,160			4,849,179			4,800,550
Diluted earnings per common share	$	0.09		$	0.16		$	0.39		$	0.46

Options to purchase 53,714 shares of common stock at a weighted-average exercise price of $10.34 per share were outstanding at both September 30, 2012 and 2011, but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares.

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 2010.

Recent Accounting Pronouncements

FASB ASU 2011-03, Transfers and Servicing (Topic 860), Reconsideration of Effective Control for Repurchase Agreements, issued in April 2011, improves the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The updated guidance is effective for the first interim or annual period beginning on or after December 15, 2011 and should be applied prospectively. The Company adopted FASB ASU 2011-03 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-04, Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements, issued in May 2011, provides guidance in common fair value measurement and disclosure requirements. The amendment changes the wording used to describe many of the requirements for measuring fair value and for disclosing information about fair value measurements. The amendments are effective during interim and annual periods beginning after December 15, 2011. The Company adopted FASB ASU 2011-04 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-05, Comprehensive Income (Topic 220), Presentation of Comprehensive Income, issued in June 2011, is designed to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in comprehensive income. The amendments are effective during interim and annual periods beginning after December 15, 2011. The Company adopted FASB ASU 2011-05 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-08, Intangibles (Topic 350), Testing Goodwill for Impairment, issued in September 2011, is designed to simplify how entities, both public and nonpublic, test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test in Topic 350. The amendments are effective during interim and annual periods beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company adopted FASB ASU 2011-08 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-12, Comprehensive Income (Topic 220), Deferral of the effective Date for Amendments to the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-12, issued in December 2011 is a deferral of only those changes in update 2011-05 that relates to the presentation of reclassification adjustments out of accumulated other comprehensive income. All other requirements in Update 2011-05 are not affected by this update, including the requirements to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted FASB ASU 2011-12 as required, without a material effect on the Company’s financial condition or results of operations.

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Portfolio Quality Indicators (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Commercial	$ 39,206	$ 35,387
Commercial Real Estate	142,781	148,052
Residential	70,834	61,765
Installment	33,501	39,243
Total	286,322	284,447
Pass
Financing Receivable, Recorded Investment [Line Items]
Commercial	35,360	31,320
Commercial Real Estate	130,792	133,949
Residential	70,834	61,590
Installment	33,423	39,161
Total	270,409	266,020
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Commercial	2,725	2,930
Commercial Real Estate	3,603	3,500
Residential		175
Installment	3	5
Total	6,331	6,610
Substandard
Financing Receivable, Recorded Investment [Line Items]
Commercial	1,121	882
Commercial Real Estate	8,009	6,924
Residential
Installment	75	77
Total	9,205	7,883
Doubtful
Financing Receivable, Recorded Investment [Line Items]
Commercial		255
Commercial Real Estate	377	3,679
Residential
Installment
Total	$ 377	$ 3,934

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Fair Value Measurements of Assets Recognized in Consolidated Balance Sheets Measured at Fair Value on Nonrecurring Basis (Detail) (Fair Value, Measurements, Nonrecurring, USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 2,743	$ 1,756
Foreclosed assets held for sale	736	415
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	2,743	1,746
Foreclosed assets held for sale	$ 736	$ 415

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash and due from banks	$ 4,933	$ 4,764
Interest-bearing demand deposits	97,303	10,917
Cash and cash equivalents	102,236	15,681
Available-for-sale securities	38,600	81,998
Held-to-maturity securities	3,511	4,450
Loans, net of allowance for loan losses of $2,773 and $2,921 at September 30, 2012 and December 31, 2011, respectively	283,549	281,526
Premises and equipment	10,453	9,804
Federal Home Loan Bank stock	4,810	4,810
Foreclosed assets held for sale, net	1,958	2,046
Intangible assets	334	424
Accrued interest receivable	1,191	1,410
Deferred income taxes	958	909
Bank-owned life insurance	10,954	10,672
Other assets	1,762	1,836
Total assets	460,316	415,566
Deposits
Demand	195,402	142,021
Savings	66,551	57,907
Time	108,031	128,612
Total deposits	369,984	328,540
Short-term borrowings	13,706	9,968
Federal Home Loan Bank advances	32,625	32,951
Subordinated debentures	4,000	4,000
Interest payable and other liabilities	3,480	3,925
Total liabilities	423,795	379,384
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 2012 - 5,375,304 shares, 2011 - 5,360,304 shares	5,375	5,360
Additional paid-in capital	17,573	17,391
Retained earnings	18,464	18,399
Stock held by deferred compensation plan; 2012 – 201,663 shares, 2011 – 197,111 shares	(1,913)	(1,856)
Unearned ESOP compensation	(1,925)	(2,081)
Accumulated other comprehensive loss	(1,015)	(920)
Treasury stock, at cost 2012 –3,157 shares, 2011 – 9,150 shares	(38)	(111)
Total stockholders’ equity	36,521	36,182
Total liabilities and stockholders’ equity	$ 460,316	$ 415,566

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Unrealized holding gains (losses) on securities during the period, taxes	$ (21)	$ 45	$ (49)	$ 335
Reclassification adjustment for realized gains included in income, taxes				$ 126

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Troubled Debt Restructuring (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Commercial
Financing Receivable, Modifications [Line Items]
Financing Receivables Modifications Number Of Contracts	3		3	6
Financing Receivable Modifications Pre Modifications Recorded Investment	$ 152		$ 152	$ 108
Financing Receivable Modifications Post Modifications Recorded Investment	66		66	107
Commercial Real Estate
Financing Receivable, Modifications [Line Items]
Financing Receivables Modifications Number Of Contracts			2	6
Financing Receivable Modifications Pre Modifications Recorded Investment			74	536
Financing Receivable Modifications Post Modifications Recorded Investment			16	536
Residential
Financing Receivable, Modifications [Line Items]
Financing Receivables Modifications Number Of Contracts
Financing Receivable Modifications Pre Modifications Recorded Investment
Financing Receivable Modifications Post Modifications Recorded Investment
Installment
Financing Receivable, Modifications [Line Items]
Financing Receivables Modifications Number Of Contracts
Financing Receivable Modifications Pre Modifications Recorded Investment
Financing Receivable Modifications Post Modifications Recorded Investment

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements of Assets Recognized in Consolidated Balance Sheets Measured at Fair Value on Recurring Basis

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 September 30, 2012 and December 31, 2011:

			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)
September 30, 2012
U.S. government agencies	$	27,063	$	––	$	27,063	$	––
State and political subdivisions		11,517		––		11,517		––
Equity securities		20		20		––		––
December 31, 2011
U.S. government agencies	$	64,168	$	––	$	64,168	$	––
State and political subdivisions		17,817		––		17,817		––
Equity securities		13		13		––		––

Fair Value Measurements of Assets Recognized in Consolidated Balance Sheets Measured at Fair Value on Nonrecurring Basis

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 September 30, 2012 and December 31, 2011.

			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)
September 30, 2012
Impaired loans	$	2,743	$	––	$	––	$	2,743
Foreclosed assets held for sale		736		––		––		736
December 31, 2011
Impaired loans	$	1,756	$	––	$	––	$	1,746
Foreclosed assets held for sale		415		––		––		415

Quantitative Information about Unabsorvable inputs used in Recurring & Nonrecurring Level 3 Fair Value Measurements other than Goodwill

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

	Fair Value at 9/30/12		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
	(In thousands)
Foreclosed assets held for sale	$	736	Market comparable properties	Comparability adjustments	Not available
Collateral-dependent impaired loans		2,743	Market comparable properties	Marketability discount	10% – 35%

Estimated Fair Values of Company's Financial Instruments

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. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. 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.

For the Three and Nine Months Ended September 30, 2012 and 2011

			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)
September 30, 2012
Financial assets
Cash and cash equivalents	$	102,236	$	102,236	$	––	$	––
Held-to-maturity securities		3,511		––		3,587		––
Loan, net of allowance		283,549		––		––		282,488
Federal Home Loan Bank stock		4,810		––		4,810		––
Accrued interest receivable		1,191		––		1,191		––
Financial liabilities
Deposits		369,984		––		350,465		––
Short term borrowings		13,706		––		13,706		––
Federal Home Loan Bank Advances		32,625		––		36,066		––
Subordinated debentures		4,000		––		3,691		––
Interest payable		197		––		197		––

The classification of the assets and liabilities pursuant to the valuation hierarchy as of December 31, 2011 in the following table have not been audited. The fair value has been derived from the December 31, 2011 audited consolidated financial statements.

			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, 2011:
Financial assets
Cash and cash equivalents	$	15,681	$	15,681	$	—	$	—
Held-to-maturity securities		4,450		––		4,597		––
Loans, net of allowance		281,526		—		––		283,055
Federal Home Loan Bank stock		4,810		––		4,810		––
Accrued interest receivable		1,410		––		1,410		––
Financial liabilities
Deposits		328,540		––		313,817		––
Short term borrowings		9,968		––		9,995		––
Federal Home Loan Bank Advances		32,951		––		35,617		––
Subordinated debentures		4,000		––		3,632		––
Interest payable		234		––		234		––

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Pension Expense (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 89	$ 76	$ 267	$ 228
Interest cost	45	43	135	129
Expected return on assets	(57)	(60)	(171)	(180)
Amortization of prior service cost and net loss	43	20	129	60
Pension expense	$ 120	$ 79	$ 360	$ 237

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Basic and Diluted Earnings Per Common Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Basic
Net income (In thousands)	$ 451	$ 801	$ 1,943	$ 2,291
Dividends on non-vested restricted stock (In thousands)	(12)	(24)	(62)	(71)
Net earnings allocated to stockholders (In thousands)	439	777	1,881	2,220
Weighted average common shares outstanding	4,784,815	4,775,728	4,778,577	4,760,297
Basic earnings per common share	$ 0.09	$ 0.16	$ 0.39	$ 0.47
Diluted
Net income allocated to stockholders (In thousands)	$ 439	$ 777	$ 1,881	$ 2,220
Weighted average common shares outstanding for basic earnings per common share	4,784,815	4,775,728	4,778,577	4,760,297
Add: Dilutive effects of assumed exercise of stock options and restricted stock	69,826	46,432	70,602	40,253
Average shares and dilutive potential common shares	4,854,641	4,822,160	4,849,179	4,800,550
Diluted earnings per common share	$ 0.09	$ 0.16	$ 0.39	$ 0.46

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating Activities
Net income	$ 1,943	$ 2,291
Items not requiring (providing) cash
Depreciation and amortization	705	725
Amortization of intangible asset	89	89
Expense related to share based compensation plans	159	160
Provision for loan losses	769	1,543
Provision for losses on foreclosed real estate	78	49
Increase in value of bank-owned life insurance	(282)	(182)
Realized gains on sales of securities		(370)
Amortization of premiums (discounts) on securities, net	(50)	(71)
Originations of loans held for sale	(771)	(4,805)
Proceeds from sale of loans held for sale	785	4,881
Realized gains on sales of loans	(14)	(76)
Amortization of ESOP	157	132
Realized losses on sales of other real estate and repossessed assets	6	10
Amortization of mortgage servicing rights	43	23
Net change in accrued interest receivable and other assets	219	(68)
Net change in accrued expenses and other liabilities	(431)	(336)
Net cash provided by operating activities	3,405	3,995
Securities available for sale:
Maturities, prepayments and calls	92,246	70,587
Purchases	(48,957)	(64,644)
Securities held to maturity:
Maturities, prepayments and calls	955	1,495
Proceeds from sale of held-to-maturity securities		302
Proceeds from sale of available for sale securities		8,886
Net change in loans	(3,239)	(1,832)
Net change in certificates of deposit in other financial institutions		2,564
Purchases of premises and equipment	(1,355)	(1,421)
Proceeds from disposal of premises and equipment		35
Proceeds from sale of other real estate and repossessed assets	467	183
Net cash provided by investing activities	40,117	16,155
Financing Activities
Net change in deposits	41,444	(1,767)
Net change in short-term borrowings	3,738	2,092
Net change in long-term borrowings	(325)	(10,396)
Shares purchased for deferred compensation plan	53	72
Proceeds from purchase of shares by Dividend Reinvestment Plan		236
Cash dividends paid on common stock	(1,877)	(2,238)
Net cash provided by (used in) financing activities	43,033	(12,001)
Increase in Cash and Cash Equivalents	86,555	8,149
Cash and Cash Equivalents, Beginning of Period	15,681	10,935
Cash and Cash Equivalents, End of Period	102,236	19,084
Supplemental Cash Flows Information
Interest paid on deposits and borrowings	3,015	3,722
Federal income taxes paid	485	765
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Transfers from loans to foreclosed assets held for sale	$ 462	$ 545

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loans, allowance for loan losses	$ 2,773	$ 2,921
Preferred stock, no par value
Preferred stock, authorized	2,000,000	2,000,000
Preferred stock, shares issued
Common stock, par value	$ 1	$ 1
Common stock, authorized	10,000,000	10,000,000
Common stock, issued	5,375,304	5,360,304
Stock held by deferred compensation plan, shares	201,663	197,111
Treasury stock, shares	3,157	9,150

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Securities (Tables)

9 Months Ended

Sep. 30, 2012

Trading Securities [Abstract]

Amortized Cost and Approximate Fair Values, Together with Gross Unrealized Gains and Losses of Securities

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
September 30, 2012
U.S. government agencies	$	26,976	$	94	$	(7	)	$	27,063
State and political subdivisions		11,020		497					11,517
Equity securities		4		16		—			20
	$	38,000	$	607	$	(7	)	$	38,600
Available-for-sale Securities:
December 31, 2011:
U.S. government agencies	$	64,077	$	98	$	(7	)	$	64,168
State and political subdivisions		17,173		652		(8	)		17,817
Equity securities		4		9		––			13
	$	81,254	$	759	$	(15	)	$	81,998

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Held-to-maturity Securities:
September 30, 2012:
State and political subdivisions	$	3,511	$	76	$	—	$	3,587
December 31, 2011:
State and political subdivisions	$	4,450	$	147	$	––	$	4,597

Amortized Cost and Fair Value of Available-for-Sale Securities and Held-to-Maturity Securities, by Contractual Maturity

The amortized cost and fair value of available-for-sale securities and held-to-maturity securities at September 30, 2012, 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.

	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Within one year	$	675	$	679	$	749	$	755
One to five years		2,419		2,522		1,785		1,848
Five to ten years		10,925		11,318		977		984
After ten years		23,977		24,061		—		—
		37,996		38,580		3,511		3,587
Equity securities		4		20		—		—
Totals	$	38,000	$	38,600	$	3,511	$	3,587

Information with Respect to Sales of Securities and Resulting Gross Realized Gains and Losses

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. Information with respect to sales of securities and resulting gross realized gains and losses was as follows:

	Nine months ended September 30
	2012		2011
	(In thousands)
Proceeds from sale	$	—	$	9,188
Gross gains		—		370
Gross losses		—		––

Investments' Gross Unrealized Losses and Fair Value, Aggregated by Investment Category and Length of Time that Individual Securities have been in Continuous Unrealized Loss Position

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 September 30, 2012 and December 31, 2011:

September 30, 2012
	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	$	2,993	$	(7	)	$	—	$	—	$	2,993	$	(7	)

December 31, 2011
	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	$	5,992	$	(7	)	$	––	$	––	$	5,992	$	(7	)
State and political subdivisions		332		(8	)		––		––		332		(8	)
Total temporarily impaired securities	$	6,324	$	(15	)	$	––	$	––	$	6,324	$	(15	)

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 09, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Trading Symbol	UBCP
Entity Registrant Name	UNITED BANCORP INC /OH/
Entity Central Index Key	0000731653
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock Shares Outstanding		5,372,147

XML

Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2012

Loans and Allowance For Loan Losses [Abstract]

Categories of Loans

Categories of loans include:

	September 30,			December 31,
	2012			2011
	(In thousands)
Commercial loans	$	39,206		$	35,387
Commercial real estate		142,781			148,052
Residential real estate		70,834			61,765
Installment loans		33,501			39,243
Total gross loans		286,322			284,447
Less allowance for loan losses		(2,773	)		(2,921	)
Total loans	$	283,549		$	281,526

Allowance for Loan Losses and Recorded Investment in Loans

Allowance for Loan Losses and Recorded Investment in Loans

As of and for the three and nine month periods ended September 30, 2012

	Commercial			Commercial Real Estate			Installment			Residential			Unallocated			Total
	(In thousands)
Allowance for loan losses:
Balance, July 1, 2012	$	418		$	1,622		$	226		$	99		$	284		$	2,649
Provision charged to expense		46			168			43			67			(56	)		268
Losses charged off		(67	)		(49	)		(86	)		(55	)		––			(257	)
Recoveries		83			7			22			1			––			113
Balance, September 30, 2012	$	480		$	1,748		$	205		$	112		$	228		$	2,773
Balance, January 1, 2012	$	183		$	2,321		$	235		$	95		$	87		$	2,921
Provision charged to expense		275			222			33			98			141			769
Losses charged off		(67	)		(804	)		(206	)		(84	)		––			(1,161	)
Recoveries		89			9			143			3			––			244
Balance, September 30, 2012	$	480		$	1,784		$	205		$	112		$	228		$	2,773
Allowance:
Ending balance:  individually evaluated for impairment	$	409		$	1,193		$	––		$	––		$	––		$	1,602
Ending balance: collectively evaluated for impairment	$	71		$	555		$	205		$	112		$	228		$	1,171
Loans:
Ending balance:  individually evaluated for impairment	$	1,068		$	7,057		$	––		$	––		$	––		$	8,125
Ending balance:  collectively evaluated for impairment	$	38,138		$	135,724		$	33,501		$	70,834		$	––		$	278,197

Allowance for Loan Losses

for the three and nine month periods ended September 30, 2011

	Commercial			Commercial Real Estate			Installment			Residential			Unallocated		Total
	(In thousands)
Allowance for loan losses:
Balance, July 1, 2011	$	159		$	1,967		$	227		$	77		$	353	$	2,783
Provision charged to expense		264			(136	)		65			32			176		401
Losses charged off		(1	)		(23	)		(96	)		(54	)		––		(174	)
Recoveries		17			7			22			5			––		51
Balance, September 30, 2011	$	439		$	1,815		$	218		$	60		$	529	$	3,061
Balance, January 1, 2011	$	561		$	1,566		$	229		$	140		$	244	$	2,740
Provision charged to expense		300			676			200			82			285		1,543
Losses charged off		(444	)		(450	)		(393	)		(169	)		––		(1,456	)
Recoveries		22			23			182			7			––		234
Balance, September 30, 2011	$	439		$	1,815		$	218		$	60		$	529	$	3,061

Allowance for Loan Losses and Recorded Investment in Loans

As of December 31, 2011

	Commercial		Commercial Real Estate		Installment		Residential		Unallocated		Total
	(In thousands)
Allowance for loan losses:
Ending balance:  individually evaluated for impairment	$	59	$	1,799	$	––	$	––	$	––	$	1,858
Ending balance:  collectively evaluated for impairment	$	124	$	522	$	235	$	95	$	87	$	1,063
Loans:
Ending balance:  individually evaluated for impairment	$	637	$	8,254	$	––	$	––	$	––	$	8,891
Ending balance:  collectively evaluated for impairment	$	34,750	$	139,798	$	39,243	$	61,765	$	––	$	275,556

Portfolio Quality Indicators

The following tables show the portfolio quality indicators.

	September 30, 2012
Loan Class	Commercial		Commercial Real Estate		Residential		Installment		Total
	(In thousands)
Pass Grade	$	35,360	$	130,792	$	70,834	$	33,423	$	270,409
Special Mention		2,725		3,603		––		3		6,331
Substandard		1,121		8,009		––		75		9,205
Doubtful		––		377		––		––		377
	$	39,206	$	142,781	$	70,834	$	33,501	$	286,322

	December 31, 2011
Loan Class	Commercial		Commercial Real Estate		Residential		Installment		Total
	(In thousands)
Pass Grade	$	31,320	$	133,949	$	61,590	$	39,161	$	266,020
Special Mention		2,930		3,500		175		5		6,610
Substandard		882		6,924		––		77		7,883
Doubtful		255		3,679		––		––		3,934
	$	35,387	$	148,052	$	61,765	$	39,243	$	284,447

Loan Portfolio Aging Analysis

Loan Portfolio Aging Analysis

As of September 30, 2012

	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	$	22	$	––	$	81	$	613	$	716	$	38,490	$	39,206
Commercial real estate		103		––		377		1,434		1,914		140,867		142,781
Installment		117		88		––		94		299		70,535		70,834
Residential		748		396		––		1,419		2,563		30,938		33,501
Total	$	990	$	484	$	458	$	3,560	$	5,492	$	280,830	$	286,322

Loan Portfolio Aging Analysis

As of December 31, 2011

	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	$	661	$	21	$	80	$	240	$	1,002	$	34,385	$	35,387
Commercial real estate		485		––		––		2,677		3,162		144,890		148,052
Installment		405		53		5		71		534		38,709		39,243
Residential		1,038		81		––		1,867		2,986		58,779		61,765
Total	$	2,589	$	155	$	85	$	4,855	$	7,684	$	276,763	$	284,447

Impaired Loans

Impaired Loans

	As of September 30, 2012						For the three months ended September 30, 2012				For the nine months ended September 30, 2012
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Commercial	$	364	$	364	$	––	$	393	$	5	$	445	$	23
Commercial real estate		3,312		4,067		––		2,160		78		2,404		164
Residential		––		––		––		19		––		19		––
		3,676		4,431		––		2,572		83		2,868		187
Loans with a specific valuation allowance:
Commercial		704		704		409		664		––		545		11
Commercial real estate		3,745		3,745		1,193		4,362		8		4,651		107
Residential		––		––		––		40		––		40		––
		4,450		4,449		1,602		5,066		8		5,236		118
Total:
Commercial	$	1,068	$	1,068	$	409	$	1,057	$	5	$	990	$	34
Commercial real estate	$	7,057	$	7,812	$	1,193	$	6,522	$	86	$	7,055	$	271
Residential	$	––	$	––	$	––	$	59	$	––	$	59	$	––

Impaired Loans

	As of December 31, 2011						Three Months Ended September 30, 2011				Nine Months Ended September 30, 2011
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Commercial	$	532	$	532	$	––	$	404	$	—	$	427	$	2
Commercial real estate		1,805		1,805		––		1,211		13		1,212		38
Residential		––		––		––		41		––		41		––
		2,337		2,337		––		1,656		13		1,680		40
Loans with a specific valuation allowance:
Commercial		105		105		59		361		3		316		9
Commercial  real estate		6,449		6,449		1,799		4,240		9		4,017		65
Residential		––		––		––		111		––		74		––
Residential		––		––		––		10		2		31		––
		6,554		6,554		1,858		4,722		14		4,438		76
Total:
Commercial	$	637	$	637	$	59	$	765	$	3	$	743	$	11
Commercial real estate	$	8,254	$	8,254	$	1,799	$	5,451	$	22	$	5,229	$	103
Residential	$	––	$	––	$	––	$	152	$	––	$	115	$	––
Installment	$	––	$	––	$	––	$	10	$	2	$	31	$	2

Troubled Debt Restructurings on Financing Receivables

During the three and nine month periods ended September 30, 2012 and 2011, for the TDRs noted in the table 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 table 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 September 30, 2012
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		3	$	152	$	66
Commercial real estate		––		––		––
Residential		––		––		––
Installment		––		––		––

	Three Months ended September 30, 2011
	Number of Contracts	Pre- Modification Outstanding  Recorded Investment	Post-Modification Outstanding  Recorded Investment
	(In thousands)
Commercial	––	––	––
Commercial real estate	––	––	––
Residential	––	––	––
Installment	––	––	––

	Nine Months ended September 30, 2012
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		3	$	152	$	66
Commercial real estate		2		74		16
Residential		––		––		––
Installment		––		––		––

	Nine Months ended September 30, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		6	$	108	$	107
Commercial real estate		6		536		536
Residential		––		––		––
Installment		––		––		––

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Interest and dividend income
Loans, including fees	$ 4,158	$ 4,415	$ 12,537	$ 13,194
Taxable securities	151	356	605	1,113
Non-taxable securities	146	247	501	831
Federal funds sold	23	4	51	15
Dividends on Federal Home Loan Bank stock and other	70	49	175	168
Total interest and dividend income	4,548	5,071	13,869	15,321
Deposits
Demand	28	27	89	92
Savings	18	15	53	49
Time	512	698	1,660	2,143
Borrowings	394	401	1,176	1,333
Total interest expense	952	1,141	2,978	3,617
Net interest income	3,596	3,930	10,891	11,704
Provision for loan losses	268	401	769	1,543
Net interest income after provision for loan losses	3,328	3,529	10,122	10,161
Noninterest income
Service charges on deposit accounts	500	559	1,516	1,582
Realized gains on sales of securities				370
Realized gains on sales of loans	5	33	14	76
Realized losses on sales of other real estate and repossessed assets		(5)	(6)	(10)
BOLI benefit in excess of surrender value				100
Other income	218	245	616	673
Total noninterest income	723	832	2,140	2,791
Noninterest expense
Salaries and employee benefits	1,713	1,632	5,035	5,103
Occupancy and equipment	477	458	1,372	1,341
Professional services	197	262	545	690
Insurance	69	73	193	200
FDIC insurance	73	33	215	240
Franchise and other taxes	123	129	377	373
Advertising	160	61	316	184
Stationery and office supplies	61	75	173	175
Amortization of intangibles	29	29	89	89
Provision for losses on foreclosed real estate	26		78	49
Other expenses	554	548	1,503	1,623
Total noninterest expense	3,482	3,300	9,896	10,067
Income before federal income taxes	569	1,061	2,366	2,885
Federal income taxes	118	260	423	594
Net income	$ 451	$ 801	$ 1,943	$ 2,291
EARNINGS PER COMMON SHARE
Basic	$ 0.09	$ 0.16	$ 0.39	$ 0.47
Diluted	$ 0.09	$ 0.16	$ 0.39	$ 0.46
DIVIDENDS PER COMMON SHARE	$ 0.07	$ 0.14	$ 0.37	$ 0.42

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Off-balance-sheet Activities

9 Months Ended

Sep. 30, 2012

Off Balance Sheet Activities [Abstract]

Off-balance-sheet Activities

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:

	September 30,		December 31,
	2012		2011
	(In thousands)
Commitments to extend credit	$	33,699	$	30,028
Commitment to originate loans		14,837		11,000
Overdraft program and ready reserve lines		13,562		11,115
Standby letters of credit		666		962

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Benefit Plans

9 Months Ended

Sep. 30, 2012

Benefit Plans [Abstract]

Benefit Plans

Note 4: Benefit Plans

Pension expense includes the following:

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
	(In thousands)
Service cost	$	89		$	76		$	267		$	228
Interest cost		45			43			135			129
Expected return on assets		(57	)		(60	)		(171	)		(180	)
Amortization of prior service cost and net loss		43			20			129			60
Pension expense	$	120		$	79		$	360		$	237

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Summary Of Significant Accounting Policies [Line Items]
Number of operating divisions	2
Number of reportable operating segment	1
Number of branch locations	20
ESOP share which are unallocated and not committed to be released	194,988	218,627
Non-vested Restricted stock not included in weighted average common stock outstanding	175,000	170,000
Number of stock options not considered in computing diluted earnings per share due to antidilutive nature	53,714	53,714
Weighted average price, option exercised	$ 10.34	$ 10.34
Citizens Bank division
Summary Of Significant Accounting Policies [Line Items]
Number of offices	12
Community Bank division
Summary Of Significant Accounting Policies [Line Items]
Number of offices	7

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Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2012

Benefit Plans [Abstract]

Pension Expense

Pension expense includes the following:

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
	(In thousands)
Service cost	$	89		$	76		$	267		$	228
Interest cost		45			43			135			129
Expected return on assets		(57	)		(60	)		(171	)		(180	)
Amortization of prior service cost and net loss		43			20			129			60
Pension expense	$	120		$	79		$	360		$	237

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

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

Nature of Operations

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, Hocking, Jefferson, and Tuscarawas Counties and the surrounding localities in northeastern, east-central and southeastern Ohio, and include a wide range of individuals, businesses and other organizations. The Citizens Bank division conducts its business through its main office in Martins Ferry, Ohio and twelve branches in Bridgeport, Colerain, Dellroy, Dillonvale, Dover, Jewett, New Philadelphia, St. Clairsville East, St. Clairsville West, Sherrodsville, Strasburg, and Tiltonsville, Ohio. The Community Bank division conducts its business through its main office in Lancaster, Ohio and seven offices in Amesville, Glouster, Lancaster, and Nelsonville, Ohio. 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 and are not considered “sub prime” type loans. The targeted lending areas of our Bank operations encompass four separate metropolitan areas, minimizing the risk to changes in economic conditions in the communities housing the Company’s 20 branch locations.

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.

Use of Estimates

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

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.

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.

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

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 uncollectibility 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 three years. Management believes the three 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.

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 duebased 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% -35% 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.

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

Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the period, less shares in the ESOP which are unallocated and not committed to be released and non-vested restricted stock. At September 30, 2012 and 2011, the ESOP held 194,988 and 218,627 unallocated shares, respectively, which were not included in weighted-average common shares outstanding. In addition at September 30, 2012 and 2011, the Company has 175,000 and 170,000 shares, respectively, of non vested restricted stock, which were not included in weighted-average common shares outstanding. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under the Company’s stock compensation plans.

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Basic
Net income (In thousands)	$	451		$	801		$	1,943		$	2,291
Dividends on non-vested restricted stock (In thousands)		(12	)		(24	)		(62	)		(71	)
Net earnings allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding		4,784,815			4,775,728			4,778,577			4,760,297
Basic earnings per common share	$	0.09		$	0.16		$	0.39		$	0.47
Diluted
Net income allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding for basic earnings per common share		4,784,815			4,775,728			4,778,577			4,760,297
Add: Dilutive effects of assumed exercise of stock options and restricted stock		69,826			46,432			70,602			40,253
Average shares and dilutive potential common shares		4,854,641			4,822,160			4,849,179			4,800,550
Diluted earnings per common share	$	0.09		$	0.16		$	0.39		$	0.46

Options to purchase 53,714 shares of common stock at a weighted-average exercise price of $10.34 per share were outstanding at both September 30, 2012 and 2011, but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average market price of the common shares.

Income Taxes

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 2010.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

FASB ASU 2011-03, Transfers and Servicing (Topic 860), Reconsideration of Effective Control for Repurchase Agreements, issued in April 2011, improves the accounting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The updated guidance is effective for the first interim or annual period beginning on or after December 15, 2011 and should be applied prospectively. The Company adopted FASB ASU 2011-03 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-04, Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements, issued in May 2011, provides guidance in common fair value measurement and disclosure requirements. The amendment changes the wording used to describe many of the requirements for measuring fair value and for disclosing information about fair value measurements. The amendments are effective during interim and annual periods beginning after December 15, 2011. The Company adopted FASB ASU 2011-04 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-05, Comprehensive Income (Topic 220), Presentation of Comprehensive Income, issued in June 2011, is designed to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in comprehensive income. The amendments are effective during interim and annual periods beginning after December 15, 2011. The Company adopted FASB ASU 2011-05 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-08, Intangibles (Topic 350), Testing Goodwill for Impairment, issued in September 2011, is designed to simplify how entities, both public and nonpublic, test goodwill for impairment. The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test in Topic 350. The amendments are effective during interim and annual periods beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company adopted FASB ASU 2011-08 as required, without a material effect on the Company’s financial condition or results of operations.

FASB ASU 2011-12, Comprehensive Income(Topic 220),Deferral of the effective Date for Amendments to the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-12, issued in December 2011 is a deferral of only those changes in update 2011-05 that relates to the presentation of reclassification adjustments out of accumulated other comprehensive income. All other requirements in Update 2011-05 are not affected by this update, including the requirements to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted FASB ASU 2011-12 as required, without a material effect on the Company’s financial condition or results of operations. 

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Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2012

Accumulated Other Comprehensive Income (Loss), Net Of Tax [Abstract]

Accumulated Other Comprehensive Loss

Note 6: Accumulated Other Comprehensive Loss

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

	September 30,  2012			December 31, 2011
	(In thousands)
Net unrealized gain on securities available-for-sale	$	600		$	744
Net unrealized loss for unfunded status of defined benefit plan liability		(2,139	)		(2,137	)
		(1,539	)		(1,393	)
Tax effect		524			473
Net-of-tax amount	$	(1,015	)	$	(920	)

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

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

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

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. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. The Company has no securities classified as Level 3 of the 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 September 30, 2012 and December 31, 2011:

			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)
September 30, 2012
U.S. government agencies	$	27,063	$	––	$	27,063	$	––
State and political subdivisions		11,517		––		11,517		––
Equity securities		20		20		––		––
December 31, 2011
U.S. government agencies	$	64,168	$	––	$	64,168	$	––
State and political subdivisions		17,817		––		17,817		––
Equity securities		13		13		––		––

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 Senior Vice President Chief Lending’s Office. Appraisals are reviewed for accuracy and consistency by the Senior Vice President Chief Lending’s Office. 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 Senior Vice President Chief Lending’s Office 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 Senior Vice President Chief Lending’s Office. Appraisals are reviewed for accuracy and consistency by the Senior Vice President, Chief Lending’s Officer and are selected from the list of approved appraisers maintained by management.

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 September 30, 2012 and December 31, 2011.

			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)
September 30, 2012
Impaired loans	$	2,743	$	––	$	––	$	2,743
Foreclosed assets held for sale		736		––		––		736
December 31, 2011
Impaired loans	$	1,756	$	––	$	––	$	1,746
Foreclosed assets held for sale		415		––		––		415

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 9/30/12		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
	(In thousands)
Foreclosed assets held for sale	$	736	Market comparable properties	Comparability adjustments	Not available
Collateral-dependent impaired loans		2,743	Market comparable properties	Marketability discount	10% – 35%

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. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. 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)
September 30, 2012
Financial assets
Cash and cash equivalents	$	102,236	$	102,236	$	––	$	––
Held-to-maturity securities		3,511		––		3,587		––
Loan, net of allowance		283,549		––		––		282,488
Federal Home Loan Bank stock		4,810		––		4,810		––
Accrued interest receivable		1,191		––		1,191		––
Financial liabilities
Deposits		369,984		––		350,465		––
Short term borrowings		13,706		––		13,706		––
Federal Home Loan Bank Advances		32,625		––		36,066		––
Subordinated debentures		4,000		––		3,691		––
Interest payable		197		––		197		––

The classification of the assets and liabilities pursuant to the valuation hierarchy as of December 31, 2011 in the following table have not been audited. The fair value has been derived from the December 31, 2011 audited consolidated financial statements.

			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, 2011:
Financial assets
Cash and cash equivalents	$	15,681	$	15,681	$	—	$	—
Held-to-maturity securities		4,450		––		4,597		––
Loans, net of allowance		281,526		—		––		283,055
Federal Home Loan Bank stock		4,810		––		4,810		––
Accrued interest receivable		1,410		––		1,410		––
Financial liabilities
Deposits		328,540		––		313,817		––
Short term borrowings		9,968		––		9,995		––
Federal Home Loan Bank Advances		32,951		––		35,617		––
Subordinated debentures		4,000		––		3,632		––
Interest payable		234		––		234		––

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.

Held-to-maturity Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated 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. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 2 of the hierarchy. The Company has no securities classified as Level 3 of the hierarchy.

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.

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 September 30, 2012 and December 31, 2011.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Basic and Diluted Earnings Per Common Share

included in weighted-average common shares outstanding. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under the Company’s stock compensation plans.

	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Basic
Net income (In thousands)	$	451		$	801		$	1,943		$	2,291
Dividends on non-vested restricted stock (In thousands)		(12	)		(24	)		(62	)		(71	)
Net earnings allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding		4,784,815			4,775,728			4,778,577			4,760,297
Basic earnings per common share	$	0.09		$	0.16		$	0.39		$	0.47
Diluted
Net income allocated to stockholders (In thousands)	$	439		$	777		$	1,881		$	2,220
Weighted average common shares outstanding for basic earnings per common share		4,784,815			4,775,728			4,778,577			4,760,297
Add: Dilutive effects of assumed exercise of stock options and restricted stock		69,826			46,432			70,602			40,253
Average shares and dilutive potential common shares		4,854,641			4,822,160			4,849,179			4,800,550
Diluted earnings per common share	$	0.09		$	0.16		$	0.39		$	0.46

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Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Commercial
Financing Receivable, Impaired [Line Items]
Recorded Balance	$ 1,068		$ 1,068		$ 637
Unpaid Principal Balance	1,068		1,068		637
Specific Allowance	409		409		59
Average Investment in Impaired Loans	1,057	765	990	743
Income Recognized	5	3	34	11
Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Recorded Balance	7,057		7,057		8,254
Unpaid Principal Balance	7,812		7,812		8,254
Specific Allowance	1,193		1,193		1,799
Average Investment in Impaired Loans	6,522	5,451	7,055	5,229
Income Recognized	86	22	271	103
Residential
Financing Receivable, Impaired [Line Items]
Recorded Balance
Unpaid Principal Balance
Specific Allowance
Average Investment in Impaired Loans	59	152	59	115
Income Recognized
Installment
Financing Receivable, Impaired [Line Items]
Recorded Balance
Unpaid Principal Balance
Specific Allowance
Average Investment in Impaired Loans		10		31
Income Recognized		2		2
Loans without a specific valuation allowance
Financing Receivable, Impaired [Line Items]
Recorded Balance	3,676		3,676		2,337
Unpaid Principal Balance	4,431		4,431		2,337
Specific Allowance
Average Investment in Impaired Loans	2,572	1,656	2,868	1,680
Income Recognized	83	13	187	40
Loans without a specific valuation allowance | Commercial
Financing Receivable, Impaired [Line Items]
Recorded Balance	364		364		532
Unpaid Principal Balance	364		364		532
Specific Allowance
Average Investment in Impaired Loans	393	404	445	427
Income Recognized	5		23	2
Loans without a specific valuation allowance | Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Recorded Balance	3,312		3,312		1,805
Unpaid Principal Balance	4,067		4,067		1,805
Specific Allowance
Average Investment in Impaired Loans	2,160	1,211	2,404	1,212
Income Recognized	78	13	164	38
Loans without a specific valuation allowance | Residential
Financing Receivable, Impaired [Line Items]
Recorded Balance
Unpaid Principal Balance
Specific Allowance
Average Investment in Impaired Loans	19	41	19	41
Income Recognized
Loans with a specific valuation allowance
Financing Receivable, Impaired [Line Items]
Recorded Balance	4,450		4,450		6,554
Unpaid Principal Balance	4,449		4,449		6,554
Specific Allowance	1,602		1,602		1,858
Average Investment in Impaired Loans	5,066	4,722	5,236	4,438
Income Recognized	8	14	118	76
Loans with a specific valuation allowance | Commercial
Financing Receivable, Impaired [Line Items]
Recorded Balance	704		704		105
Unpaid Principal Balance	704		704		105
Specific Allowance	409		409		59
Average Investment in Impaired Loans	664	361	545	316
Income Recognized		3	11	9
Loans with a specific valuation allowance | Commercial Real Estate
Financing Receivable, Impaired [Line Items]
Recorded Balance	3,745		3,745		6,449
Unpaid Principal Balance	3,745		3,745		6,449
Specific Allowance	1,193		1,193		1,799
Average Investment in Impaired Loans	4,362	4,240	4,651	4,017
Income Recognized	8	9	107	65
Loans with a specific valuation allowance | Residential
Financing Receivable, Impaired [Line Items]
Recorded Balance
Unpaid Principal Balance
Specific Allowance
Average Investment in Impaired Loans	40	111	40	74
Income Recognized
Loans with a specific valuation allowance | Installment
Financing Receivable, Impaired [Line Items]
Average Investment in Impaired Loans		10		31
Income Recognized		$ 2

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Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2012

Accumulated Other Comprehensive Income (Loss), Net Of Tax [Abstract]

Components of Accumulated Other Comprehensive Loss included in Stockholders Equity

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

	September 30,  2012			December 31, 2011
	(In thousands)
Net unrealized gain on securities available-for-sale	$	600		$	744
Net unrealized loss for unfunded status of defined benefit plan liability		(2,139	)		(2,137	)
		(1,539	)		(1,393	)
Tax effect		524			473
Net-of-tax amount	$	(1,015	)	$	(920	)

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Amortized Cost and Fair Value of Available-for-Sale Securities and Held-to-Maturity Securities, by Contractual Maturity (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Available-for-sale, Amortized Cost
Within one year	$ 675
One to five years	2,419
Five to ten years	10,925
After ten years	23,977
Available for sale Securities, Debt Maturities, with Single Maturity Date, Amortized Cost, Total	37,996
Equity securities	4
Totals	38,000	81,254
Available-for-sale, Fair Value
Within one year	679
One to five years	2,522
Five to ten years	11,318
After ten years	24,061
Available for sale Securities, Debt Maturities, with Single Maturity Date, Fair Value, Total	38,580
Equity securities	20
Available-for-sale Securities, Approximate Fair Value	38,600	81,998
Held-to-maturity, Amortized Cost
Within one year	749
One to five years	1,785
Five to ten years	977
After ten years
Held-to-maturity Securities, Debt Maturities, with Single Maturity Date, Net Carrying Amount, Total	3,511
Equity securities
Totals	3,511	4,450
Held-to-maturity, Fair Value
Within one year	755
One to five years	1,848
Five to ten years	984
After ten years
Held-to-maturity Securities, Debt Maturities, with Single Maturity Date, Fair Value, Total	3,587
Equity securities
Held-to-maturity Securities, Approximate Fair Value	$ 3,587	$ 4,597

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Quantitative Information About Unobservable Inputs Used in Recurring & Nonrecurring Level 3 Fair Value Measurements Other Than Goodwill (Detail) (Fair Value, Inputs, Level 3, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Foreclosed assets held for sale
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 736
Valuation Technique	Market comparable properties
Unobservable Inputs	Comparability adjustments
Collateral-dependent impaired loans
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value	$ 2,743
Valuation Technique	Market comparable properties
Unobservable Inputs	Marketability discount
Collateral-dependent impaired loans | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range	10.00%
Collateral-dependent impaired loans | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Range	35.00%

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net income	$ 451	$ 801	$ 1,943	$ 2,291
Other comprehensive income (loss), net of tax:
Unrealized holding (losses) gains on securities during the period, net of taxes of ($21), $45, ($49) and $335 for each respective period	(40)	87	(95)	651
Reclassification adjustment for realized gains included in income, net of taxes of $126 for the nine month period ended September 30, 2011				(244)
Comprehensive income	411	888	1,848	2,698
Accumulated comprehensive loss	$ (1,015)	$ (300)	$ (1,015)	$ (300)

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Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2012

Loans and Allowance For Loan Losses [Abstract]

Loans and Allowance for Loan Losses

Note 3: Loans and Allowance for Loan Losses

Categories of loans include:

	September 30,			December 31,
	2012			2011
	(In thousands)
Commercial loans	$	39,206		$	35,387
Commercial real estate		142,781			148,052
Residential real estate		70,834			61,765
Installment loans		33,501			39,243
Total gross loans		286,322			284,447
Less allowance for loan losses		(2,773	)		(2,921	)
Total loans	$	283,549		$	281,526

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.

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 and Consumer

Residential 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 and nine month periods ended September 30, 2012

	Commercial			Commercial Real Estate			Installment			Residential			Unallocated			Total
	(In thousands)
Allowance for loan losses:
Balance, July 1, 2012	$	418		$	1,622		$	226		$	99		$	284		$	2,649
Provision charged to expense		46			168			43			67			(56	)		268
Losses charged off		(67	)		(49	)		(86	)		(55	)		––			(257	)
Recoveries		83			7			22			1			––			113
Balance, September 30, 2012	$	480		$	1,748		$	205		$	112		$	228		$	2,773
Balance, January 1, 2012	$	183		$	2,321		$	235		$	95		$	87		$	2,921
Provision charged to expense		275			222			33			98			141			769
Losses charged off		(67	)		(804	)		(206	)		(84	)		––			(1,161	)
Recoveries		89			9			143			3			––			244
Balance, September 30, 2012	$	480		$	1,784		$	205		$	112		$	228		$	2,773
Allowance:
Ending balance:  individually evaluated for impairment	$	409		$	1,193		$	––		$	––		$	––		$	1,602
Ending balance: collectively evaluated for impairment	$	71		$	555		$	205		$	112		$	228		$	1,171
Loans:
Ending balance:  individually evaluated for impairment	$	1,068		$	7,057		$	––		$	––		$	––		$	8,125
Ending balance:  collectively evaluated for impairment	$	38,138		$	135,724		$	33,501		$	70,834		$	––		$	278,197

Allowance for Loan Losses

for the three and nine month periods ended September 30, 2011

	Commercial			Commercial Real Estate			Installment			Residential			Unallocated		Total
	(In thousands)
Allowance for loan losses:
Balance, July 1, 2011	$	159		$	1,967		$	227		$	77		$	353	$	2,783
Provision charged to expense		264			(136	)		65			32			176		401
Losses charged off		(1	)		(23	)		(96	)		(54	)		––		(174	)
Recoveries		17			7			22			5			––		51
Balance, September 30, 2011	$	439		$	1,815		$	218		$	60		$	529	$	3,061
Balance, January 1, 2011	$	561		$	1,566		$	229		$	140		$	244	$	2,740
Provision charged to expense		300			676			200			82			285		1,543
Losses charged off		(444	)		(450	)		(393	)		(169	)		––		(1,456	)
Recoveries		22			23			182			7			––		234
Balance, September 30, 2011	$	439		$	1,815		$	218		$	60		$	529	$	3,061

Allowance for Loan Losses and Recorded Investment in Loans

As of December 31, 2011

	Commercial		Commercial Real Estate		Installment		Residential		Unallocated		Total
	(In thousands)
Allowance for loan losses:
Ending balance:  individually evaluated for impairment	$	59	$	1,799	$	––	$	––	$	––	$	1,858
Ending balance:  collectively evaluated for impairment	$	124	$	522	$	235	$	95	$	87	$	1,063
Loans:
Ending balance:  individually evaluated for impairment	$	637	$	8,254	$	––	$	––	$	––	$	8,891
Ending balance:  collectively evaluated for impairment	$	34,750	$	139,798	$	39,243	$	61,765	$	––	$	275,556

The following tables show the portfolio quality indicators.

	September 30, 2012
Loan Class	Commercial		Commercial Real Estate		Residential		Installment		Total
	(In thousands)
Pass Grade	$	35,360	$	130,792	$	70,834	$	33,423	$	270,409
Special Mention		2,725		3,603		––		3		6,331
Substandard		1,121		8,009		––		75		9,205
Doubtful		––		377		––		––		377
	$	39,206	$	142,781	$	70,834	$	33,501	$	286,322

	December 31, 2011
Loan Class	Commercial		Commercial Real Estate		Residential		Installment		Total
	(In thousands)
Pass Grade	$	31,320	$	133,949	$	61,590	$	39,161	$	266,020
Special Mention		2,930		3,500		175		5		6,610
Substandard		882		6,924		––		77		7,883
Doubtful		255		3,679		––		––		3,934
	$	35,387	$	148,052	$	61,765	$	39,243	$	284,447

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.

Loan Portfolio Aging Analysis

As of September 30, 2012

	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	$	22	$	––	$	81	$	613	$	716	$	38,490	$	39,206
Commercial real estate		103		––		377		1,434		1,914		140,867		142,781
Installment		117		88		––		94		299		70,535		70,834
Residential		748		396		––		1,419		2,563		30,938		33,501
Total	$	990	$	484	$	458	$	3,560	$	5,492	$	280,830	$	286,322

Loan Portfolio Aging Analysis

As of December 31, 2011

	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	$	661	$	21	$	80	$	240	$	1,002	$	34,385	$	35,387
Commercial real estate		485		––		––		2,677		3,162		144,890		148,052
Installment		405		53		5		71		534		38,709		39,243
Residential		1,038		81		––		1,867		2,986		58,779		61,765
Total	$	2,589	$	155	$	85	$	4,855	$	7,684	$	276,763	$	284,447

Impaired Loans

	As of September 30, 2012						For the three months ended September 30, 2012				For the nine months ended September 30, 2012
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Commercial	$	364	$	364	$	––	$	393	$	5	$	445	$	23
Commercial real estate		3,312		4,067		––		2,160		78		2,404		164
Residential		––		––		––		19		––		19		––
		3,676		4,431		––		2,572		83		2,868		187
Loans with a specific valuation allowance:
Commercial		704		704		409		664		––		545		11
Commercial real estate		3,745		3,745		1,193		4,362		8		4,651		107
Residential		––		––		––		40		––		40		––
		4,450		4,449		1,602		5,066		8		5,236		118
Total:
Commercial	$	1,068	$	1,068	$	409	$	1,057	$	5	$	990	$	34
Commercial real estate	$	7,057	$	7,812	$	1,193	$	6,522	$	86	$	7,055	$	271
Residential	$	––	$	––	$	––	$	59	$	––	$	59	$	––

Impaired Loans

	As of December 31, 2011						Three Months Ended September 30, 2011				Nine Months Ended September 30, 2011
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized		Average Investment in Impaired Loans		Interest Income Recognized
	(In thousands)
Loans without a specific valuation allowance:
Commercial	$	532	$	532	$	––	$	404	$	—	$	427	$	2
Commercial real estate		1,805		1,805		––		1,211		13		1,212		38
Residential		––		––		––		41		––		41		––
		2,337		2,337		––		1,656		13		1,680		40
Loans with a specific valuation allowance:
Commercial		105		105		59		361		3		316		9
Commercial  real estate		6,449		6,449		1,799		4,240		9		4,017		65
Residential		––		––		––		111		––		74		––
Residential		––		––		––		10		2		31		––
		6,554		6,554		1,858		4,722		14		4,438		76
Total:
Commercial	$	637	$	637	$	59	$	765	$	3	$	743	$	11
Commercial real estate	$	8,254	$	8,254	$	1,799	$	5,451	$	22	$	5,229	$	103
Residential	$	––	$	––	$	––	$	152	$	––	$	115	$	––
Installment	$	––	$	––	$	––	$	10	$	2	$	31	$	2

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

During the three and nine month periods ended September 30, 2012 and 2011, for the TDRs noted in the table 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 table 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 September 30, 2012
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		3	$	152	$	66
Commercial real estate		––		––		––
Residential		––		––		––
Installment		––		––		––

	Three Months ended September 30, 2011
	Number of Contracts	Pre- Modification Outstanding  Recorded Investment	Post-Modification Outstanding  Recorded Investment
	(In thousands)
Commercial	––	––	––
Commercial real estate	––	––	––
Residential	––	––	––
Installment	––	––	––

	Nine Months ended September 30, 2012
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		3	$	152	$	66
Commercial real estate		2		74		16
Residential		––		––		––
Installment		––		––		––

	Nine Months ended September 30, 2011
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(In thousands)
Commercial		6	$	108	$	107
Commercial real estate		6		536		536
Residential		––		––		––
Installment		––		––		––

At September 30, 2012 and 2011 and for the nine and three months periods ended, 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.

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Securities - Additional Information (Detail) (USD $)	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2012	Dec. 31, 2011
Schedule Of Marketable Securities [Line Items]
Carrying value securities pledged as collateral		$ 30,500,000	$ 58,200,000
Number of securities sold	1
Amortized cost of security sold	295,000
Gain realized on sale of securities	7,000
Debt Securities
Schedule Of Marketable Securities [Line Items]
Fair Value of Investment in debt securities		$ 2,900,000	$ 6,300,000
Percentage of fair value of investment in debt		7.00%	7.00%

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Components of Accumulated Other Comprehensive Loss Included in Stockholders' Equity (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Other Comprehensive Income (Loss) [Line Items]
Net unrealized gain on securities available-for-sale	$ 600	$ 744
Net unrealized loss for unfunded status of defined benefit plan liability	(2,139)	(2,137)
Accumulated Other Comprehensive Income (Loss), Before Taxes, Total	(1,539)	(1,393)
Tax effect	524	473
Net-of-tax amount	$ (1,015)	$ (920)	$ (300)

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Off-balance-sheet Activities (Tables)

9 Months Ended

Sep. 30, 2012

Off Balance Sheet Activities [Abstract]

Notional or Contractual Amounts of Financial Instruments with Off-Balance-Sheet Risk

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

	September 30,		December 31,
	2012		2011
	(In thousands)
Commitments to extend credit	$	33,699	$	30,028
Commitment to originate loans		14,837		11,000
Overdraft program and ready reserve lines		13,562		11,115
Standby letters of credit		666		962