Michigan
|
|
0-16640
|
|
38-2606280
|
(State or other jurisdiction
of incorporation or organization)
|
|
Commission
File Number
|
|
(I.R.S. Employer
Identification No.)
|
q
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
q
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
q
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
q
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
|
99.1
|
Press Release dated July 26, 2013
|
|
|
|
|
|
|
|
United Bancorp, Inc. (Registrant)
|
|
By:
|
|
|
|
|
Date: July 26, 2013
|
/s/ Randal J. Rabe
|
|
Randal J. Rabe
Executive Vice President and Chief Financial Officer
|
FOR IMMEDIATE RELEASE:
|
CONTACT:
|
Robert K. Chapman,
|
July 26, 2013
|
|
President and Chief Executive Officer
|
|
|
United Bancorp, Inc.
|
|
|
734-214-3801
|
·
|
Improved profitability:
|
-
|
Net income of $2.1 million (0.92% return on average assets ("ROA")) for the quarter; year to date $4.0 million (0.90% ROA)
|
-
|
Core earnings, as measured by pre-tax, pre-provision income, were 1.59% of average assets
|
-
|
Earnings per share of common stock of $0.14 for the quarter and $0.27 year to date
|
·
|
Improving trends in credit quality metrics:
|
-
|
Nonperforming loans decreased by 5% in the quarter and 45% over the last twelve months
|
-
|
Allowance for loan losses was 3.55% of loans, representing over five times the year to date annualized net charge-offs
|
-
|
Ratio of allowance for loan losses to nonperforming loans at 155% at June 30, 2013
|
-
|
Nonperforming assets were 1.83% of total assets at June 30, 2013; lowest level since the third quarter of 2007
|
·
|
Noninterest income represented 43% of the Company's year to date combined net interest income and noninterest income, as a result of the Company's diverse revenue stream
|
·
|
Continued favorable trend in loan growth:
|
-
|
$19 million (3.1%) increase in the quarter
|
-
|
$42 million (7.2%) increase over the last twelve months
|
·
|
Capital planning and approval for planned partial Preferred Share redemption:
|
-
|
In July, the Company received regulatory approval to redeem half of its outstanding $20.6 million Preferred Shares; partial redemption is expected to occur in the third quarter of 2013
|
-
|
Received $10.0 million commitment for a two-year revolving line of credit for the holding company; received regulatory approval to use up to $6.0 million borrowed on the line of credit toward funding of redemption of the Preferred Shares.
|
United Bancorp, Inc. and Subsidiary
|
||||||||||||||||||||||||||||
Comparative Consolidated Balance Sheet Data (Unaudited)
|
||||||||||||||||||||||||||||
Dollars in thousands
|
June 30,
|
Mar. 31,
|
Dec. 31,
|
June 30,
|
||||||||||||||||||||||||
Period-end Balance Sheet
|
2013
|
2013
|
Change
|
2012
|
Change
|
2012
|
Change
|
|||||||||||||||||||||
Assets
|
||||||||||||||||||||||||||||
Cash and due from banks
|
$
|
18,608
|
$
|
13,316
|
$
|
5,292
|
$
|
13,769
|
$
|
4,839
|
$
|
16,225
|
$
|
2,383
|
||||||||||||||
Interest bearing bal. with banks
|
35,924
|
69,942
|
(34,018
|
)
|
56,843
|
(20,919
|
)
|
57,591
|
(21,667
|
)
|
||||||||||||||||||
Total cash & cash equivalents
|
54,532
|
83,258
|
(28,726
|
)
|
70,612
|
(16,080
|
)
|
73,816
|
(19,284
|
)
|
||||||||||||||||||
Securities available for sale
|
195,141
|
203,251
|
(8,110
|
)
|
206,129
|
(10,988
|
)
|
191,886
|
3,255
|
|||||||||||||||||||
FHLB Stock
|
2,691
|
2,571
|
120
|
2,571
|
120
|
2,571
|
120
|
|||||||||||||||||||||
Loans held for sale
|
7,022
|
9,630
|
(2,608
|
)
|
13,380
|
(6,358
|
)
|
10,349
|
(3,327
|
)
|
||||||||||||||||||
Portfolio loans
|
618,974
|
600,121
|
18,853
|
586,678
|
32,296
|
577,279
|
41,695
|
|||||||||||||||||||||
Allowance for loan losses
|
22,001
|
22,158
|
(157
|
)
|
22,543
|
(542
|
)
|
22,097
|
(96
|
)
|
||||||||||||||||||
Net loans
|
596,973
|
577,963
|
19,010
|
564,135
|
32,838
|
555,182
|
41,791
|
|||||||||||||||||||||
Premises and equipment, net
|
10,500
|
10,455
|
45
|
10,719
|
(219
|
)
|
10,793
|
(293
|
)
|
|||||||||||||||||||
Bank owned life insurance
|
14,440
|
14,340
|
100
|
14,241
|
199
|
14,028
|
412
|
|||||||||||||||||||||
Other assets
|
26,031
|
25,759
|
272
|
25,954
|
77
|
25,527
|
504
|
|||||||||||||||||||||
Total Assets
|
$
|
907,330
|
$
|
927,227
|
$
|
(19,897
|
)
|
$
|
907,741
|
$
|
(411
|
)
|
$
|
884,152
|
$
|
23,178
|
||||||||||||
Liabilities
|
||||||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||||||
Non-interest bearing
|
$
|
163,738
|
$
|
152,325
|
$
|
11,413
|
$
|
165,430
|
$
|
(1,692
|
)
|
$
|
161,307
|
$
|
2,431
|
|||||||||||||
Interest bearing
|
628,381
|
651,720
|
(23,339
|
)
|
619,213
|
9,168
|
600,081
|
28,300
|
||||||||||||||||||||
Total deposits
|
792,119
|
804,045
|
(11,926
|
)
|
784,643
|
7,476
|
761,388
|
30,731
|
||||||||||||||||||||
FHLB advances outstanding
|
11,999
|
19,999
|
(8,000
|
)
|
21,999
|
(10,000
|
)
|
23,775
|
(11,776
|
)
|
||||||||||||||||||
Other liabilities
|
4,810
|
4,182
|
628
|
3,702
|
1,108
|
3,876
|
934
|
|||||||||||||||||||||
Total Liabilities
|
808,928
|
828,226
|
(19,298
|
)
|
810,344
|
(1,416
|
)
|
789,039
|
19,889
|
|||||||||||||||||||
Shareholders' Equity
|
98,402
|
99,001
|
(599
|
)
|
97,397
|
1,005
|
95,113
|
3,289
|
||||||||||||||||||||
Total Liabilities and Equity
|
$
|
907,330
|
$
|
927,227
|
$
|
(19,897
|
)
|
$
|
907,741
|
$
|
(411
|
)
|
$
|
884,152
|
$
|
23,178
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||
Average Balance Data
|
2013
|
2012
|
% Change
|
2013
|
2012
|
% Change
|
||||||||||||||||||||||
Total loans
|
$
|
614,557
|
$
|
588,108
|
4.5
|
%
|
$
|
608,667
|
$
|
586,897
|
3.7
|
%
|
||||||||||||||||
Earning assets
|
862,079
|
850,277
|
1.4
|
%
|
863,885
|
848,992
|
1.8
|
%
|
||||||||||||||||||||
Total assets
|
905,384
|
888,830
|
1.9
|
%
|
905,367
|
890,911
|
1.6
|
%
|
||||||||||||||||||||
Deposits
|
785,698
|
765,490
|
2.6
|
%
|
785,869
|
769,818
|
2.1
|
%
|
||||||||||||||||||||
Shareholders' Equity
|
99,158
|
94,414
|
5.0
|
%
|
98,392
|
94,073
|
4.6
|
%
|
||||||||||||||||||||
Asset Quality
|
||||||||||||||||||||||||||||
Net charge offs
|
$
|
757
|
$
|
1,501
|
-49.6
|
%
|
$
|
2,142
|
$
|
3,186
|
-32.8
|
%
|
||||||||||||||||
Nonaccrual loans
|
13,910
|
25,634
|
-45.7
|
%
|
||||||||||||||||||||||||
Nonperforming loans
|
14,208
|
25,876
|
-45.1
|
%
|
||||||||||||||||||||||||
Nonperforming assets
|
16,610
|
29,268
|
-43.2
|
%
|
||||||||||||||||||||||||
Nonperforming loans/total loans
|
2.30
|
%
|
4.48
|
%
|
-48.8
|
%
|
||||||||||||||||||||||
Nonperforming assets/total assets
|
1.83
|
%
|
3.31
|
%
|
-44.7
|
%
|
||||||||||||||||||||||
Allowance for loan loss/total loans
|
3.55
|
%
|
3.83
|
%
|
-7.1
|
%
|
||||||||||||||||||||||
Allowance/nonperforming loans
|
154.8
|
%
|
85.4
|
%
|
81.3
|
%
|
United Bancorp, Inc. and Subsidiary
|
||||||||||||||||||||||||
Comparative Consolidated Income Statement and Performance Data (Unaudited)
|
||||||||||||||||||||||||
Dollars in thousands except per share data
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||||||||||
Consolidated Income Statement
|
2013
|
2012
|
% Change
|
2013
|
2012
|
% Change
|
||||||||||||||||||
Interest Income
|
||||||||||||||||||||||||
Interest and fees on loans
|
$
|
7,681
|
$
|
7,852
|
-2.2
|
%
|
$
|
15,197
|
$
|
15,778
|
-3.7
|
%
|
||||||||||||
Interest on investment securities
|
885
|
863
|
2.5
|
%
|
1,493
|
1,716
|
-13.0
|
%
|
||||||||||||||||
Interest on fed funds sold & bank balances
|
29
|
43
|
-32.6
|
%
|
65
|
97
|
-33.0
|
%
|
||||||||||||||||
Total interest income
|
8,595
|
8,758
|
-1.9
|
%
|
16,755
|
17,591
|
-4.8
|
%
|
||||||||||||||||
Interest Expense
|
||||||||||||||||||||||||
Interest on deposits
|
680
|
985
|
-31.0
|
%
|
1,415
|
2,041
|
-30.7
|
%
|
||||||||||||||||
Interest on FHLB advances
|
91
|
207
|
-56.0
|
%
|
228
|
415
|
-45.1
|
%
|
||||||||||||||||
Total interest expense
|
771
|
1,192
|
-35.3
|
%
|
1,643
|
2,456
|
-33.1
|
%
|
||||||||||||||||
Net Interest Income
|
7,824
|
7,566
|
3.4
|
%
|
15,112
|
15,135
|
-0.2
|
%
|
||||||||||||||||
Provision for loan losses
|
600
|
2,550
|
-76.5
|
%
|
1,600
|
4,650
|
-65.6
|
%
|
||||||||||||||||
Net Interest Income After Provision
|
7,224
|
5,016
|
44.0
|
%
|
13,512
|
10,485
|
28.9
|
%
|
||||||||||||||||
Noninterest Income
|
||||||||||||||||||||||||
Service charges on deposit accounts
|
472
|
449
|
5.1
|
%
|
896
|
882
|
1.6
|
%
|
||||||||||||||||
Trust & Investment fee income
|
1,487
|
1,311
|
13.4
|
%
|
2,891
|
2,536
|
14.0
|
%
|
||||||||||||||||
Gains on securities transactions
|
11
|
-
|
0.0
|
%
|
39
|
4
|
875.0
|
%
|
||||||||||||||||
Income from loan sales and servicing
|
2,767
|
2,592
|
6.8
|
%
|
5,819
|
4,496
|
29.4
|
%
|
||||||||||||||||
ATM, debit and credit card fee income
|
561
|
559
|
0.4
|
%
|
1,057
|
1,066
|
-0.8
|
%
|
||||||||||||||||
Income from bank-owned life insurance
|
100
|
106
|
-5.7
|
%
|
199
|
210
|
-5.2
|
%
|
||||||||||||||||
Other income
|
249
|
261
|
-4.6
|
%
|
670
|
842
|
-20.4
|
%
|
||||||||||||||||
Total noninterest income
|
5,647
|
5,278
|
7.0
|
%
|
11,571
|
10,036
|
15.3
|
%
|
||||||||||||||||
Noninterest Expense
|
||||||||||||||||||||||||
Salaries and employee benefits
|
6,223
|
5,221
|
19.2
|
%
|
12,100
|
10,222
|
18.4
|
%
|
||||||||||||||||
Occupancy and equipment expense
|
1,357
|
1,320
|
2.8
|
%
|
2,705
|
2,638
|
2.5
|
%
|
||||||||||||||||
External data processing
|
353
|
267
|
32.2
|
%
|
725
|
514
|
41.1
|
%
|
||||||||||||||||
Advertising and marketing expenses
|
292
|
184
|
58.7
|
%
|
556
|
377
|
47.5
|
%
|
||||||||||||||||
Attorney & other professional fees
|
349
|
770
|
-54.7
|
%
|
760
|
1,238
|
-38.6
|
%
|
||||||||||||||||
Director fees
|
104
|
97
|
7.2
|
%
|
209
|
195
|
7.2
|
%
|
||||||||||||||||
Expenses relating to ORE property and foreclosed
assets
|
259
|
183
|
41.5
|
%
|
427
|
1,116
|
-61.7
|
%
|
||||||||||||||||
FDIC Insurance premiums
|
190
|
296
|
-35.8
|
%
|
376
|
591
|
-36.4
|
%
|
||||||||||||||||
Other expense
|
747
|
810
|
-7.8
|
%
|
1,502
|
1,426
|
5.3
|
%
|
||||||||||||||||
Total noninterest expense
|
9,874
|
9,148
|
7.9
|
%
|
19,360
|
18,317
|
5.7
|
%
|
||||||||||||||||
Income Before Federal Income Tax
|
2,997
|
1,146
|
161.5
|
%
|
5,723
|
2,204
|
159.7
|
%
|
||||||||||||||||
Federal income tax
|
910
|
361
|
152.1
|
%
|
1,694
|
577
|
193.6
|
%
|
||||||||||||||||
Net Income
|
$
|
2,087
|
$
|
785
|
165.9
|
%
|
$
|
4,029
|
$
|
1,627
|
147.6
|
%
|
||||||||||||
Performance Ratios
|
||||||||||||||||||||||||
Return on average assets
|
0.92
|
%
|
0.36
|
%
|
0.57
|
%
|
0.90
|
%
|
0.37
|
%
|
0.53
|
%
|
||||||||||||
Return on average equity
|
8.44
|
%
|
3.35
|
%
|
5.10
|
%
|
8.26
|
%
|
3.48
|
%
|
4.78
|
%
|
||||||||||||
Pre-tax, pre-provision ROA (1)
|
1.59
|
%
|
1.67
|
%
|
-0.08
|
%
|
1.63
|
%
|
1.55
|
%
|
0.08
|
%
|
||||||||||||
Net interest margin (FTE)
|
3.68
|
%
|
3.62
|
%
|
0.06
|
%
|
3.57
|
%
|
3.63
|
%
|
-0.06
|
%
|
||||||||||||
Efficiency ratio
|
72.8
|
%
|
70.7
|
%
|
2.07
|
%
|
72.0
|
%
|
72.2
|
%
|
-0.16
|
%
|
||||||||||||
Common Stock Performance
|
||||||||||||||||||||||||
Basic & diluted earnings per share
|
$
|
0.14
|
$
|
0.04
|
$
|
0.10
|
$
|
0.27
|
$
|
0.08
|
$
|
0.19
|
||||||||||||
Book value per share
|
6.13
|
5.88
|
0.25
|
|||||||||||||||||||||
Tangible book value per share
|
6.13
|
5.88
|
0.25
|
|||||||||||||||||||||
Market value per share (2)
|
5.40
|
3.40
|
2.00
|
United Bancorp, Inc. and Subsidiary
|
||||||||||||||||||||
Trends of Selected Consolidated Financial Data (Unaudited)
|
||||||||||||||||||||
Dollars in thousands except per share data
|
2013
|
2012
|
||||||||||||||||||
Balance Sheet Data
|
2nd Qtr
|
1st Qtr
|
4th Qtr
|
3rd Qtr
|
2nd Qtr
|
|||||||||||||||
Period-end:
|
||||||||||||||||||||
Portfolio loans
|
$
|
618,974
|
$
|
600,121
|
$
|
586,678
|
$
|
591,808
|
$ |
577,279
|
||||||||||
Total loans
|
625,996
|
609,751
|
600,058
|
603,574
|
587,628
|
|||||||||||||||
Allowance for loan losses
|
22,001
|
22,158
|
22,543
|
22,460
|
22,097
|
|||||||||||||||
Earning assets
|
859,752
|
885,515
|
865,505
|
856,034
|
839,188
|
|||||||||||||||
Total assets
|
907,330
|
927,227
|
907,741
|
898,581
|
884,152
|
|||||||||||||||
Deposits
|
792,119
|
804,045
|
784,643
|
776,025
|
761,388
|
|||||||||||||||
Shareholders' Equity
|
98,402
|
99,001
|
97,397
|
96,836
|
95,113
|
|||||||||||||||
Average:
|
||||||||||||||||||||
Total loans
|
$
|
614,557
|
$
|
602,711
|
$
|
595,726
|
$
|
595,736
|
$ |
588,108
|
||||||||||
Earning assets
|
862,079
|
865,711
|
861,263
|
847,743
|
850,277
|
|||||||||||||||
Total assets
|
905,384
|
907,707
|
905,321
|
892,235
|
888,830
|
|||||||||||||||
Deposits
|
785,698
|
786,042
|
945,688
|
766,627
|
765,490
|
|||||||||||||||
Shareholders' Equity
|
99,158
|
97,637
|
96,833
|
95,483
|
94,414
|
|||||||||||||||
Income Statement Summary
|
||||||||||||||||||||
Net interest income
|
$
|
7,824
|
$
|
7,288
|
$
|
7,384
|
$
|
7,646
|
$
|
7,566
|
||||||||||
Non-interest income
|
5,647
|
5,924
|
5,891
|
5,564
|
5,278
|
|||||||||||||||
Net revenue
|
13,471
|
13,212
|
13,275
|
13,210
|
12,844
|
|||||||||||||||
Non-interest expense
|
9,874
|
9,486
|
9,586
|
9,300
|
9,148
|
|||||||||||||||
Pre-tax, pre-provision income (1)
|
3,597
|
3,726
|
3,689
|
3,910
|
3,696
|
|||||||||||||||
Provision for loan losses
|
600
|
1,000
|
1,700
|
2,000
|
2,550
|
|||||||||||||||
Federal income tax
|
910
|
784
|
543
|
520
|
361
|
|||||||||||||||
Net income
|
2,087
|
1,942
|
1,446
|
1,390
|
785
|
|||||||||||||||
Basic & diluted income per share
|
$
|
0.14
|
$
|
0.13
|
$
|
0.09
|
$
|
0.09
|
$
|
0.04
|
||||||||||
Performance Ratios and Liquidity
|
||||||||||||||||||||
Return on average assets
|
0.92
|
%
|
0.87
|
%
|
0.64
|
%
|
0.62
|
%
|
0.36
|
%
|
||||||||||
Return on average common equity
|
8.44
|
%
|
8.07
|
%
|
5.94
|
%
|
5.79
|
%
|
3.35
|
%
|
||||||||||
Pre-tax, pre-provision ROA (1)
|
1.59
|
%
|
1.66
|
%
|
1.62
|
%
|
1.74
|
%
|
1.67
|
%
|
||||||||||
Net interest margin (FTE)
|
3.68
|
%
|
3.46
|
%
|
3.45
|
%
|
3.63
|
%
|
3.62
|
%
|
||||||||||
Efficiency ratio
|
72.8
|
%
|
71.3
|
%
|
71.7
|
%
|
69.9
|
%
|
70.7
|
%
|
||||||||||
Ratio of loans to deposits
|
78.1
|
%
|
74.6
|
%
|
74.8
|
%
|
76.3
|
%
|
75.8
|
%
|
||||||||||
Asset Quality
|
||||||||||||||||||||
Net charge offs
|
$
|
757
|
$
|
1,384
|
$
|
1,617
|
$
|
1,638
|
$
|
1,501
|
||||||||||
Nonaccrual loans
|
13,910
|
14,598
|
16,714
|
20,386
|
25,634
|
|||||||||||||||
Nonperforming loans
|
14,208
|
14,978
|
16,751
|
20,792
|
25,876
|
|||||||||||||||
Nonperforming assets
|
16,610
|
18,084
|
20,163
|
22,971
|
29,268
|
|||||||||||||||
Nonperforming loans/portfolio loans
|
2.30
|
%
|
2.50
|
%
|
2.86
|
%
|
3.51
|
%
|
4.48
|
%
|
||||||||||
Nonperforming assets/total assets
|
1.83
|
%
|
1.95
|
%
|
2.22
|
%
|
2.56
|
%
|
3.31
|
%
|
||||||||||
Allowance for loan loss/portfolio loans
|
3.55
|
%
|
3.69
|
%
|
3.84
|
%
|
3.80
|
%
|
3.83
|
%
|
||||||||||
Allowance/nonperforming loans
|
154.8
|
%
|
147.9
|
%
|
134.6
|
%
|
108.0
|
%
|
85.4
|
%
|
||||||||||
Market Data for Common Stock
|
||||||||||||||||||||
Book value per share
|
$
|
6.13
|
$
|
6.17
|
$
|
6.05
|
$
|
6.01
|
$
|
5.88
|
||||||||||
Market value per share (2)
|
||||||||||||||||||||
High
|
6.00
|
5.99
|
4.65
|
4.20
|
3.55
|
|||||||||||||||
Low
|
5.10
|
4.35
|
3.91
|
3.26
|
3.25
|
|||||||||||||||
Period-end
|
5.40
|
5.10
|
4.50
|
4.20
|
3.40
|
|||||||||||||||
Period-end shares outstanding
|
12,713
|
12,716
|
12,706
|
12,706
|
12,707
|
|||||||||||||||
Average shares outstanding
|
12,713
|
12,709
|
12,706
|
12,706
|
12,701
|
Trends of Selected Consolidated Financial Data (continued)
|
||||||||||||||||||||
2013
|
2012
|
|||||||||||||||||||
Capital and Stock Performance
|
2nd Qtr
|
1st Qtr
|
4th Qtr
|
3rd Qtr
|
2nd Qtr
|
|||||||||||||||
Tier 1 Leverage Ratio
|
10.7
|
%
|
10.5
|
%
|
10.2
|
%
|
10.1
|
%
|
9.9
|
%
|
||||||||||
Tangible common equity to total assets
|
8.6
|
%
|
8.5
|
%
|
8.5
|
%
|
8.5
|
%
|
8.4
|
%
|
||||||||||
Total capital to risk-weighted assets
|
16.5
|
%
|
16.8
|
%
|
16.7
|
%
|
16.4
|
%
|
16.4
|
%
|
||||||||||
Price/earnings ratio (TTM)
|
12.0
|
x
|
14.6
|
x
|
17.3
|
x
|
12.7
|
x
|
68.0
|
x
|
||||||||||
Period-end common stock market price/book value
|
88.2
|
%
|
82.6
|
%
|
74.3
|
%
|
69.9
|
%
|
57.8
|
%
|
(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.
|