FOR IMMEDIATE RELEASE:	CONTACT:	Robert K. Chapman,
October 26, 2012		President and Chief Executive Officer
		United Bancorp, Inc.
		734-214-3801

UNITED BANCORP, INC. ANNOUNCES UNAUDITED

THIRD QUARTER AND YEAR TO DATE 2012 RESULTS

ANN ARBOR, MI – United Bancorp, Inc. (OTCQB: UBMI) reported consolidated net income of $1.4 million, or $0.09 per share of common stock, for the third quarter of 2012, compared to a consolidated net loss of $2.1 million, or $0.19 per share of common stock, for the third quarter of 2011. Consolidated net income for the first nine months of 2012 was $3.0 million, or $0.17 per share of common stock, compared to a consolidated net loss of $1.4 million, or $0.18 per share of common stock, for the first nine months of 2011.

Highlights of the third quarter of 2012 include:

·	Continued improving trends in profitability

·	Steady improvement in net interest income resulting from loan growth and core funding

·	Noninterest income reaches record levels

·	Favorable operating leverage achieved compared to the same period last year

·	Improving trends in credit quality measures

-	Allowance for loan losses/nonperforming loans above 100% for the first time since the second quarter of 2007

-	21.5% decrease in nonperforming assets in the third quarter of 2012

-	Nonperforming assets at their lowest levels since the second quarter of 2009

·	Capital ratios remained strong, and continued to improve

Robert K. Chapman, President and Chief Executive Officer of United Bancorp, Inc. ("United" or the "Company"), commented, "The third quarter of 2012 was especially encouraging for us, as we achieved significant improvement in our credit quality." He noted that the improvements in credit quality measures and the resulting lower levels of loan loss provision have been a contributing factor in the Company's return toward sustained profitability. The Company's double-digit increases in noninterest income also have significantly contributed to the higher earnings levels achieved so far in 2012.

United unveiled a new brand campaign, including an updated logo and related branding treatment, in the third quarter of 2012. Mr. Chapman noted that the rebranding effort more accurately reflects the transformation of the Company in recent years. Mr. Chapman commented, "We have been growing into new communities and expanding our footprint in SBA lending, commercial lending specializing in professional services, and mortgage lending. Going forward, our recognizable logo and related rebranding will better position us for the future."

Results of Operations

United achieved its fourth consecutive quarter of profitability in the quarter ended September 30, 2012, and the sixth profitable quarter since the end of 2010. The Company's consolidated net income was $1.4 million in the third quarter of 2012 and $3.0 million for the nine months ended September 30, 2012, compared to losses of $2.1 million and $1.4 million, respectively, for the same periods of

Page 1

2011. Performance ratios also continued to improve for the three and nine months ended September 30, 2012. Return on average assets ("ROA") was 0.62% and 0.45%, respectively, for the third quarter and first nine months of 2012, compared to -0.95% and -0.21%, respectively, for the comparable periods of 2011. Return on average shareholders' equity ("ROE") was 5.79% and 4.26%, respectively, for the third quarter and first nine months of 2012, compared to -8.85% and -1.97%, respectively, for the same periods of 2011.

Net Interest Income and Net Interest Margin

For the third quarter of 2012, United's net interest income of $7.6 million was up 2.8% compared to the same period of 2011, and net interest income of $22.8 million for the first nine months of 2012 was 1.9% above the same period of 2011. Despite continued downward pressure on both short and long-term interest rates, United has maintained a stable net interest margin over the past several quarters, primarily as a result of three factors – portfolio loan growth, deployment of excess liquidity, and funding of growth with core deposits.

The Company's mix of assets has evolved over recent quarters, resulting in a slowing of the decline in its yields on earning assets. Portfolio loan growth of $14.5 million in the third quarter and $28.1 million in first nine months of 2012 has contributed to this shift in mix. The Company converted its loan production office in Brighton, Michigan to a full-service banking office in the second quarter of 2012, and opened a new loan production office within the City of Monroe, Michigan in July 2012. Both offices have contributed to increased lending activity. In addition, loan volumes within the Bank's existing markets have improved modestly.

The Company has held historically high levels of liquidity since 2009, during this extended period of economic uncertainty. While the additional liquidity contributed to the Company's margin compression during that time period, a shift of a portion of its liquidity from federal funds and equivalents to investment securities in 2012 has slowed United's decline in yields on earning assets. At the same time, the Bank has reduced its average balances of FHLB advances and higher-cost deposits during the third quarter and first nine months of 2012, and continues to fund its growth primarily with core deposits. United's net interest margin was 3.63% for both the three and nine month periods ended September 30, 2012, compared to 3.58% and 3.63% respectively, for the same periods of 2011.

Noninterest Income

Total noninterest income for the quarter and nine month periods ended September 30, 2012 was up 30.7% and 24.0%, respectively, compared to the same periods of 2011. United's double-digit increases in noninterest income continued to be a significant driver of the Company's improved earnings. This improvement in noninterest income was driven, in part, by increased loan originations, both of residential mortgages and SBA loans. The Company has experienced mortgage loan originators and SBA lending expertise, supported by a strong internal loan underwriting, processing and servicing infrastructure. In the first nine months of 2012, the Company has originated and sold $271.6 million of loans, and at September 30, 2012, United's servicing portfolio consisted of $816.3 million of loans the Company has originated and sold on the secondary market.

Operating Leverage

As a result of strong financial performance, the Company's combined net interest income and noninterest income was up 13.0% in the third quarter and 9.8% in the first nine months of 2012 compared to the same periods of 2011. During the same periods, the Company's noninterest expense increased by 2.4% and 7.0%, respectively.

Page 2

Noninterest Expense

Total noninterest expenses were up $216,000 and $1.8 million, respectively, in the third quarter and first nine months of 2012, compared to the same periods of 2011. Salaries and employee benefits for the third quarter and first nine months of 2012 increased by 14.8% and 11.2%, respectively, over the same periods one year earlier. The increases reflect, in part, continued higher levels of commissions and other compensation costs related to the generation of income from loan sales and servicing. In addition, the Company has increased its staffing levels modestly to accommodate its expansion into Livingston and Monroe Counties. The Company did not pay or accrue any cash bonus or other payout to executive officers or non-commissioned employees under our bonus plans in 2011 or the first nine months of 2012.

Attorney, accounting and other professional fees were down 12.6% in the third quarter of 2012 compared to the same quarter of 2011. For the first nine months of 2012, these expenses were up 23.2% over the same period of 2011. However, attorney, accounting and other professional fees in the second quarter of 2012 included $299,000 of legal and accounting costs related to the sale by the U.S. Treasury of all of the Company's 20,600 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, during that quarter.

The Company reduced its advertising and marketing expenditures by approximately 50% in 2009 compared to 2008, and those expenses have remained at reduced levels since that time. Advertising and marketing expenses increased by 15.9% in the third quarter and 17.6% in the first nine months of 2012 compared to the same periods of 2011.The increase partially reflects the Company's launch of a new branding initiative in the third quarter of 2012. This branding initiative represents a renewed emphasis on marketing and the Company expects a trend toward more historic spending levels for marketing and advertising expense.

Expenses related to ORE and other foreclosed properties decreased by nearly $400,000 in the third quarter of 2012 compared to the third quarter of 2011, but have increased by $207,000 in the first nine months of 2012 compared to the same period of 2011. Those expenses included write-downs of the value and losses on the sale of property held as ORE, along with costs to maintain and carry those properties. In addition, during the first six months of 2012, the Company recorded $770,000 of probable incurred expenses relating to residential mortgages previously sold on the secondary market that subsequently defaulted, and no such expense was recorded in the third quarter of 2012.

The Company's provision for loan losses for the third quarter and first nine months of 2012 was $2.0 million and $6.7 million, respectively, down from $6.0 million and $11.9 million for the same periods of 2011. The reduced level of provision for loan losses is a direct result of United's improvement in its credit quality measures.

Balance Sheet

Total consolidated assets of the Company were $898.6 million at September 30, 2012, compared to $885.0 million at December 31, 2011 and $894.4 million at September 30, 2011. The Company's recent loan growth reflects United's entry into adjacent markets, combined with a moderate strengthening of the local economy. Total portfolio loans of $591.8 million increased by $28.1 million, or 5.0%, in the first nine months of 2012, and by $14.2 million, or 2.5%, since September 30, 2011.

United's balances in federal funds sold and other short-term investments were $52.0 million at September 30, 2012, compared to $91.8 million at December 31, 2011 and $99.4 million at

Page 3

September 30, 2011. Securities available for sale of $198.1 million at September 30, 2012 were up $24.8 million from December 31, 2011 levels and have increased by $33.1 million since September 30, 2011.

Total deposits of $776.0 million at September 30, 2012 were up $11.2 million from $764.9 million at December 31, 2011, with all of the growth in non-interest bearing deposit balances. The majority of the Bank's deposits are derived from core client sources, relating to long-term relationships with local individual, business and public clients. Public clients include local government and municipal bodies, hospitals, universities and other educational institutions.

Asset Quality

The Company achieved significant improvement in its asset quality measures in the third quarter of 2012, continuing the recent trends. United's ratio of allowance for loan losses to total loans was 3.80% and the ratio of allowance for loan losses to nonperforming loans was 108.0% at September 30, 2012, compared to 3.66% and 80.0%, respectively, at December 31, 2011, and 4.22% and 81.8%, respectively, at September 30, 2011. The Company's allowance for loan losses increased by $1.8 million from December 31, 2011 to September 30, 2012, as provision for loan losses expense has exceeded net charge-offs in each of the quarters of 2012. Net charge-offs have averaged approximately $1.6 million per quarter for 2012, representing the lowest level since the second quarter of 2008.

The Company's level of nonperforming assets was at its lowest level since the second quarter of 2009. A significant portion of the decline in nonperforming assets in the third quarter of 2012 was the result of payoffs of three nonaccrual loans totaling $4.5 million. Nonperforming assets include nonperforming loans, plus balances of other real estate owned. Within the Company's loan portfolio, $20.8 million of loans were considered nonperforming at September 30, 2012, compared to $25.8 million at December 31, 2011 and $29.8 million at September 30, 2011. Total nonperforming loans as a percent of total portfolio loans decreased from 4.57% at the end of 2011 and 5.16% at September 30, 2011 to 3.51% at September 30, 2012. For purposes of this presentation, nonperforming loans consist of nonaccrual loans and accruing loans that are past due 90 days or more, and exclude accruing restructured loans.

Capital Management

In December 2010, the Company closed its public offering of 7,583,800 shares of common stock. The net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, were approximately $17.1 million. The Company has contributed $12.0 million of the net proceeds of the offering to the capital of the Bank to increase the Bank's capital and regulatory capital ratios. As a result of the capital contribution and improved profitability, the Bank was in compliance with the capital requirements of its MOU with the FDIC and OFIR at December 31, 2010 and 2011, and September 30, 2012. At September 30, 2012, the Bank's Tier 1 capital ratio was 9.63%, and its ratio of total capital to risk-weighted assets was 15.61%, and the Bank was categorized as well-capitalized under applicable regulatory guidelines.

About United Bancorp, Inc.

United Bancorp, Inc. is a community-based financial services company located in Washtenaw, Lenawee, Livingston and Monroe Counties in Michigan. United Bank & Trust is the Company's only subsidiary, and the Bank provides financial solutions to its clients based on their unique circumstances and needs, through a line of business delivery system that includes banking, mortgage,

Page 4

structured finance and wealth management. For more information, visit the Company's website at www.ubat.com.

Forward-Looking Statements

This press release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and United Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as "trends," "continue," "improving," "toward," "going forward," "will," "position," "future," "uncertainty," "initiative," "expect" and variations of such words and similar expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to asset and credit quality trends, future levels of profitability, future economic conditions, loan demand, and future growth of the Company, including the benefits to the Company of expansion into new markets and the effects of our rebranding initiative. All statements referencing future time periods are forward-looking.

Management's determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including mortgage servicing rights and deferred tax assets) and other real estate owned and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated or that other real estate owned can be sold at its carrying value or at all. Our ability to fully comply with all of the provisions of our memorandum of understanding, successfully implement new programs and initiatives, increase efficiencies, utilize our deferred tax asset, address regulatory issues, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and on United Bancorp, Inc., specifically, are also inherently uncertain. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("risk factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. United Bancorp, Inc. undertakes no obligation to update, clarify or revise forward-looking statements to reflect developments that occur or information obtained after the date of this report.

Risk factors include, but are not limited to, the risk factors described in "Item 1A – Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2011. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

Non-GAAP Financial Information

This press release includes disclosures about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets. These disclosures are non-GAAP financial measures. For additional information about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets, please see the unaudited consolidated financial statements and related footnotes that follow.

Unaudited Consolidated Financial Statements Follow.

Page 5

United Bancorp, Inc. and Subsidiary
Comparative Consolidated Balance Sheet Data (Unaudited)

Dollars in thousands	Sept. 30,		June 30,					Dec. 31,					Sept. 30,
Period-end Balance Sheet	2012		2012		Change			2011		Change			2011		Change
Assets
Cash and due from banks	$	16,247	$	16,225	$	22		$	15,798	$	449		$	15,893	$	354
Interest bearing bal. with banks		52,029		57,591		(5,562	)		91,428		(39,399	)		99,420		(47,391	)
Federal funds sold		-		-		-			366		(366	)		-		-
Total cash & cash equivalents		68,276		73,816		(5,540	)		107,592		(39,316	)		115,313		(47,037	)

Securities available for sale		198,069		191,886		6,183			173,197		24,872			164,945		33,124
FHLB Stock		2,571		2,571		-			2,571		-			2,571		-
Loans held for sale		11,766		10,349		1,417			8,290		3,476			7,709		4,057

Portfolio loans
Personal		111,181		108,556		2,625			103,405		7,776			106,207		4,974
Business ⁽¹⁾		345,471		346,135		(664	)		337,178		8,293			347,898		(2,427	)
Residential mortgage		86,811		83,444		3,367			83,072		3,739			81,734		5,077
Construction & development		48,136		38,656		9,480			39,721		8,415			41,478		6,658
Deferred fees and costs		209		488		(279	)		326		(117	)		283		(74	)
Total portfolio loans		591,808		577,279		14,529			563,702		28,106			577,600		14,208
Allowance for loan losses		22,460		22,097		363			20,633		1,827			24,357		(1,897	)
Net loans		569,348		555,182		14,166			543,069		26,279			553,243		16,105

Premises and equipment, net		10,793		10,793		-			10,795		(2	)		10,631		162
Bank owned life insurance		14,134		14,028		106			13,819		315			13,710		424
Other assets		23,624		25,527		(1,903	)		25,676		(2,052	)		26,283		(2,659	)
Total Assets	$	898,581	$	884,152	$	14,429		$	885,009	$	13,572		$	894,405	$	4,176

Liabilities
Deposits
Non-interest bearing	$	159,333	$	161,307	$	(1,974	)	$	139,346	$	19,987		$	134,673	$	24,660
Interest bearing		616,692		600,081		16,611			625,510		(8,818	)		640,856		(24,164	)
Total deposits		776,025		761,388		14,637			764,856		11,169			775,529		496
FHLB advances outstanding		21,759		23,775		(2,016	)		24,035		(2,276	)		24,054		(2,295	)
Other liabilities		3,961		3,876		85			2,344		1,617			3,017		944
Total Liabilities		801,745		789,039		12,706			791,235		10,510			802,600		(855	)
Shareholders' Equity		96,836		95,113		1,723			93,774		3,062			91,805		5,031
Total Liabilities and Equity	$	898,581	$	884,152	$	14,429		$	885,009	$	13,572		$	894,405	$	4,176

	Three months ended Sept. 30,									Nine months ended Sept. 30,
Average Balance Data	2012			2011			% Change			2012		2011		% Change
Total loans	$	595,736		$	583,042			2.2	%	$	589,865	$	583,534		1.1	%
Earning assets		847,743			836,529			1.3	%		848,573		836,363		1.5	%
Total assets		892,235			876,095			1.8	%		890,539		873,808		1.9	%
Deposits		766,627			752,355			1.9	%		768,908		749,082		2.6	%
Shareholders' Equity		95,483			94,159			1.4	%		94,546		93,477		1.1	%

Asset Quality
Net charge offs	$	1,638		$	7,013			-76.6	%	$	4,824	$	12,706		-62.0	%
Non-accrual loans		20,386			29,392			-30.6	%
Non-performing loans		20,792			29,778			-30.2	%
Non-performing assets		22,971			34,079			-32.6	%
Nonperforming loans/total loans		3.51	%		5.16	%		-31.9	%
Nonperforming assets/total assets		2.56	%		3.81	%		-32.9	%
Allowance for loan loss/total loans		3.80	%		4.22	%		-10.0	%
Allowance/nonperforming loans		108.0	%		81.8	%		32.1	%

⁽¹⁾Business loans include commercial mortgages and tax exempt loans

Page 6

United Bancorp, Inc. and Subsidiary
Comparative Consolidated Income Statement and Performance Data (Unaudited)

Dollars in thousands except per share data	Three months ended Sept. 30,									Nine months ended Sept. 30,
Consolidated Income Statement	2012			2011			% Change			2012			2011			% Change
Interest Income
Interest and fees on loans	$	7,917		$	7,918			0.0	%	$	23,695		$	24,253			-2.3	%
Interest on investment securities		778			925			-15.9	%		2,494			2,629			-5.1	%
Interest on fed funds sold & bank balances		36			63			-42.9	%		133			204			-34.8	%
Total interest income		8,731			8,906			-2.0	%		26,322			27,086			-2.8	%

Interest Expense
Interest on deposits		895			1,250			-28.4	%		2,936			3,969			-26.0	%
Interest on other liabilities		-			-			0.0	%		-			11			-100.0	%
Interest on FHLB advances		190			219			-13.2	%		605			742			-18.5	%
Total interest expense		1,085			1,469			-26.1	%		3,541			4,722			-25.0	%
Net Interest Income		7,646			7,437			2.8	%		22,781			22,364			1.9	%
Provision for loan losses		2,000			6,000			-66.7	%		6,650			11,900			-44.1	%
Net Interest Income After Provision		5,646			1,437			292.9	%		16,131			10,464			54.2	%

Noninterest Income
Service charges on deposit accounts		496			486			2.1	%		1,378			1,500			-8.1	%
Trust & Investment fee income		1,319			1,226			7.6	%		3,855			3,780			2.0	%
Gains on securities transactions		-			-			0.0	%		4			-			0.0	%
Income from loan sales and servicing		2,803			1,610			74.1	%		7,299			4,540			60.8	%
ATM, debit and credit card fee income		517			550			-6.0	%		1,583			1,619			-2.2	%
Income from bank-owned life insurance		106			108			-1.9	%		316			320			-1.3	%
Other income		323			276			17.0	%		1,165			817			42.6	%
Total noninterest income		5,564			4,256			30.7	%		15,600			12,576			24.0	%

Noninterest Expense
Salaries and employee benefits		5,464			4,759			14.8	%		15,686			14,101			11.2	%
Occupancy and equipment expense		1,350			1,276			5.8	%		3,988			3,819			4.4	%
External data processing		250			392			-36.2	%		764			1,041			-26.6	%
Advertising and marketing expenses		190			164			15.9	%		567			482			17.6	%
Attorney & other professional fees		416			476			-12.6	%		1,654			1,342			23.2	%
Director fees		98			102			-3.9	%		293			305			-3.9	%
Expenses relating to ORE property and foreclosed assets		417			815			-48.8	%		1,533			1,326			15.6	%
FDIC Insurance premiums		292			288			1.4	%		883			1,021			-13.5	%
Other expense		823			812			1.4	%		2,249			2,366			-4.9	%
Total noninterest expense		9,300			9,084			2.4	%		27,617			25,803			7.0	%
Income (Loss) Before Federal Income Tax		1,910			(3,391	)					4,114			(2,763	)
Federal income tax (benefit)		520			(1,291	)					1,097			(1,383	)
Net Income (Loss)	$	1,390		$	(2,100	)				$	3,017		$	(1,380	)

Performance Ratios
Return on average assets		0.62	%		-0.95	%		1.57	%		0.45	%		-0.21	%		0.66	%
Return on average equity		5.79	%		-8.85	%		14.64	%		4.26	%		-1.97	%		6.23	%
Pre-tax, pre-provision ROA ⁽¹⁾		1.74	%		1.19	%		0.55	%		1.61	%		1.40	%		0.22	%
Net interest margin (FTE)		3.63	%		3.58	%		0.05	%		3.63	%		3.63	%		0.00	%
Efficiency ratio		69.9	%		77.0	%		-7.07	%		71.4	%		73.1	%		-1.72	%

Common Stock Performance
Basic & diluted earnings (loss) per share	$	0.09		$	(0.19	)	$	0.28		$	0.17		$	(0.18	)	$	0.35
Book value per share										$	6.01		$	5.63		$	0.38
Tangible book value per share											6.01			5.63			0.38
Market value per share⁽²⁾											4.20			2.95			1.25

Page 7

United Bancorp, Inc. and Subsidiary
Trends of Selected Consolidated Financial Data (Unaudited)

Dollars in thousands except per share data	2012									2011
Balance Sheet Data	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
Period-end:
Portfolio loans	$	591,808		$	577,279		$	575,508		$	563,702		$	577,600
Total loans		603,574			587,628			587,227			571,992			585,309
Allowance for loan losses		22,460			22,097			21,048			20,633			24,357
Earning assets		856,034			839,188			869,231			839,554			852,245
Total assets		898,581			884,152			914,450			885,009			894,405
Deposits		776,025			761,388			792,497			764,856			775,529
Shareholders' Equity		96,836			95,113			94,265			93,774			91,806
Average:
Total loans	$	595,736		$	588,108		$	585,686		$	582,956		$	583,042
Earning assets		847,743			850,277			851,836			841,457			836,529
Total assets		892,235			888,830			894,346			881,480			876,095
Deposits		766,627			765,490			773,977			762,706			752,355
Shareholders' Equity		95,483			94,414			93,732			92,122			94,159

Income Statement Summary
Net interest income	$	7,646		$	7,566		$	7,569		$	7,687		$	7,437
Non-interest income		5,564			5,278			4,758			4,635			4,256
Net revenue		13,210			12,844			12,327			12,322			11,693
Non-interest expense		9,300			9,148			9,169			8,815			9,084
Pre-tax, pre-provision income⁽¹⁾		3,910			3,696			3,158			3,507			2,609
Provision for loan losses		2,000			2,550			2,100			250			6,000
Federal income tax		520			361			216			960			(1,291	)
Net income (loss)		1,390			785			842			2,297			(2,100	)
Basic & diluted income (loss) per share	$	0.09		$	0.04		$	0.04		$	0.16		$	(0.19	)

Performance Ratios and Liquidity
Return on average assets		0.62	%		0.36	%		0.38	%		1.03	%		-0.95	%
Return on average common equity		5.79	%		3.35	%		3.61	%		9.89	%		-8.85	%
Pre-tax, pre-provision ROA⁽¹⁾		1.74	%		1.67	%		1.42	%		1.59	%		1.19	%
Net interest margin (FTE)		3.63	%		3.62	%		3.62	%		3.67	%		3.58	%
Efficiency ratio		69.9	%		70.7	%		73.8	%		70.9	%		77.0	%
Ratio of loans to deposits		76.3	%		75.8	%		72.6	%		73.7	%		74.5	%

Asset Quality
Net charge offs	$	1,638		$	1,501		$	1,685		$	3,974		$	7,013
Non-accrual loans		20,386			25,634			25,958			25,754			29,392
Non-performing loans		20,792			25,876			25,971			25,785			29,778
Non-performing assets		22,971			29,268			29,455			29,454			34,079
Nonperforming loans/portfolio loans		3.51	%		4.48	%		4.51	%		4.57	%		5.16	%
Nonperforming assets/total assets		2.56	%		3.31	%		3.22	%		3.33	%		3.81	%
Allowance for loan loss/portfolio loans		3.80	%		3.83	%		3.66	%		3.66	%		4.22	%
Allowance/nonperforming loans		108.0	%		85.4	%		81.0	%		80.0	%		81.8	%

Market Data for Common Stock
Book value per share	$	6.01		$	5.88		$	5.82		$	5.78		$	5.63
Market value per share ⁽²⁾
High		4.20			3.55			3.45			2.80			3.50
Low		3.26			3.25			2.49			2.20			2.90
Period-end		4.20			3.40			3.35			2.50			2.95
Period-end shares outstanding		12,706			12,707			12,699			12,697			12,697
Average shares outstanding		12,706			12,701			12,697			12,697			12,696

Page 8

Trends of Selected Consolidated Financial Data (continued)

	2012									2011
Capital and Stock Performance	3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
Tier 1 Leverage Ratio		10.1	%		9.9	%		9.8	%		9.9	%		9.6	%
Tangible common equity to total assets		8.5	%		8.4	%		8.1	%		8.3	%		8.0	%
Total capital to risk-weighted assets		16.4	%		16.4	%		16.3	%		16.5	%		15.6	%
Period-end common stock market price/book value		69.9	%		57.8	%		57.6	%		43.2	%		52.4	%

⁽¹⁾	In an attempt to evaluate the trends of net interest income, noninterest income and noninterest expense, the Company calculates pre-tax, pre-provision income ("PTPP Income") and pre-tax, pre-provision return on average assets ("PTPP ROA"). PTPP Income adjusts net income by the amount of the Company's federal income tax (benefit) and provision for loan losses, which is excluded because its level is elevated and volatile in times of economic stress. PTPP ROA measures PTPP Income as a percent of average assets. While this information is not consistent with, or intended to replace, presentation under generally accepted accounting principles, it is presented here for comparison.
	Management believes that PTPP Income and PTPP ROA are useful and consistent measures of the Company's earning capacity, as these financial measures enable investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle, particularly in times of economic stress.

⁽²⁾	Market value per share is based on the last reported transaction on OTCQB before period end.