EX-99.1 2 k33401exv99w1.txt EX-99.1 EXHIBIT 99.1 FOR IMMEDIATE RELEASE: CONTACT: Robert K. Chapman July 25, 2008 United Bancorp, Inc. 734-214-3801 UNITED BANCORP, INC. ANNOUNCES SECOND QUARTER 2008 EARNINGS TECUMSEH, MI - United Bancorp, Inc. (UBMI), reported net income of $1,695,300 or $.33 per share for the quarter ended June 30, 2008, compared to $2,267,200 or $.43 per share for the same quarter of 2007. Earnings for the first six months of 2008 were $3,583,400, or $.70 per share, compared to $3,993,200, or $.75 per share for the same period of 2007. Financial Performance Additions to the Company's allowance for loan losses reduced net income during the second quarter of 2008, resulting in a decline in net income from the prior quarter and the same quarter of 2007. While loan quality and competitive pricing pressure have continued to negatively impact the Company's net interest margin, non-interest income has increased 12.8% over the same quarter of 2007 and now represents 33% of total revenue. Robert K. Chapman, President and Chief Executive Officer of United Bancorp, noted "We continue to address the issues of tightening margin and credit quality resulting from the current economic conditions, while building on our strengths to grow our noninterest income." Asset Quality In the second quarter of 2008, the Company's provision for loan loss was $1.65 million, up from $710,000 for the same quarter of 2007, bringing the provision for the first six months of 2008 to $2.31 million. This compares to a provision of $2.22 million for the same period of 2007, for an increase of 4.1%. The increase in provision relates to the Company's recognition of potential losses relating to a few large business loans and the Company's corresponding increase in the amount of its Allowance for Loan Losses at June 30, 2008. Management continues to be concerned for economic conditions within Michigan and the market areas of its banks, but remains diligent in addressing credit issues in its loan portfolio. At June 30, 2008, the Company's allowance for loan loss was 1.96% of total loans, up slightly from the end of the first quarter, and up from 1.19% at June 30, 2007. The Company's ratio of total nonperforming loans to total loans increased from 2.48% at March 31, 2008 to 2.65% at June 30, 2008. At the end of the current quarter, non-performing loans totaled $17.5 million, compared to $16.2 million at the end of the first quarter of 2008 and $7.5 million one year earlier. Financial Condition Total consolidated assets of the Company of $798.9 million at June 30, 2008 were up 2.2% from the same period last year. At the end of June, portfolio loan balances reached $662.0 million, up 4.4% from June 30, 2007, and loan growth was $28.0 million over the past year. Deposits at June 30, 2008 were $669.1 million, for an increase of 1.9% compared with the prior year balance. About United Bancorp, Inc. United Bancorp, Inc. is an independent financial holding company that is the parent company for United Bank & Trust and United Bank & Trust - Washtenaw. The subsidiary banks operate seventeen banking offices in Lenawee, Washtenaw and Monroe counties, and United Bank & Trust maintains an active wealth management group that serves the Company's market area. For more information, visit the company's website at www.ubat.com. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOLLOW. Safe Harbor Statement This news release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21 B of the Securities Act of 1934, as amended, which are intended to be safe harbors created thereby. Those statements are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and about the Company itself. Words such as "anticipate," "believe," "determine," "estimate," "expect," "forecast," "intend," "is likely," "plan," "project," "opinion," variations of such terms, and similar expressions are intended to identify such forward-looking statements. The presentations and discussions of the provision and allowance for loan losses presented in this report are inherently forward-looking statements in that they involve judgments and statements of belief as to the outcome of future events. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions 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. Internal and external factors that may cause such a difference include changes in economic conditions in the market area the Company conducts business which could materially impact credit quality trends, interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior and customer ability to repay loans; software failure, errors or miscalculations; and the vicissitudes of the national economy. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events, or otherwise. ### UNITED BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
June 30, December 31, June 30, (Dollars in thousands except per share data) 2008 2007 2007 --------- ------------ -------- ASSETS Cash and demand balances in other banks $ 16,481.0 $ 17,995.8 $ 19,138.9 Federal funds sold 2,050.0 11,130.0 -- ------------- ------------ ------------ Total cash and cash equivalents 18,531.0 29,125.8 19,138.9 Securities available for sale 83,203.7 85,897.6 89,363.1 Loans held for sale 5,249.3 5,770.1 6,008.8 Portfolio loans Personal 102,185.7 98,658.5 97,439.1 Business 464,657.8 451,717.5 447,302.0 Residential mortgage 95,170.3 94,154.0 89,315.1 ------------- ------------ ------------ Total loans 662,013.8 644,530.0 634,056.2 Less allowance for loan losses 13,008.0 12,305.9 7,560.7 ------------- ------------ ------------ Net loans 649,005.8 632,224.1 626,495.5 Premises and equipment, net 12,861.7 13,160.3 13,366.7 Goodwill 3,469.1 3,469.1 3,469.1 Bank owned life insurance 12,193.9 11,960.5 11,721.1 Accrued interest receivable and other assets 14,407.9 14,079.9 12,076.7 ------------- ------------ ------------ TOTAL ASSETS $ 798,922.4 $ 795,687.4 $ 781,639.9 ============= ============ ============ LIABILITIES Deposits Non-interest bearing $ 89,088.2 $ 77,877.9 $ 86,248.6 Interest bearing 579,966.2 593,659.3 570,617.8 ------------- ------------ ------------ Total deposits 669,054.4 671,537.2 656,866.4 Fed funds borrowed -- -- 2,800.0 FHLB advances outstanding 51,462.0 44,611.1 42,135.7 Accrued interest payable and other liabilities 4,954.0 6,572.0 4,336.7 ------------- ------------ ------------ TOTAL LIABILITIES 725,470.4 722,720.3 706,138.8 ------------- ------------ ------------ SHAREHOLDERS' EQUITY Common stock and paid in capital, no par value; 10,000,000 shares authorized; 5,052,443, 5,092,230 and 5,216,770 shares issued and outstanding, respectively 67,178.9 67,860.0 70,406.6 Retained earnings 6,346.3 4,814.2 5,319.0 Accumulated other comprehensive income, net of tax (73.2) 292.9 (224.5) ------------- ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 73,452.0 72,967.1 75,501.1 ------------- ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 798,922.4 $ 795,687.4 $ 781,639.9 ============= ============ ============ Book value per share of common stock $ 14.54 $ 14.33 $ 14.47
(Per share values restated to reflect 2007 stock dividend) 3 UNITED BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Quarter to Date Year to Date ----------------------- ----------------------- June 30, June 30, June 30, June 30, (Dollars in thousands except per share data) 2008 2007 2008 2007 ---------- ---------- ---------- --------- INTEREST INCOME Interest and fees on loans $ 10,567.0 $ 11,853.2 $ 21,899.0 $23,006.5 Interest on investment securities 922.4 1,011.4 1,886.4 2,085.3 Interest on federal funds sold 2.0 15.7 121.5 142.0 ---------- ---------- ---------- --------- Total interest income 11,491.4 12,880.3 23,906.9 25,233.8 INTEREST EXPENSE Interest on deposits 3,480.0 4,807.5 7,888.0 9,365.4 Interest on federal funds purchased 68.9 80.0 75.6 86.9 Interest on FHLB advances 555.3 514.9 1,078.5 1,011.6 ---------- ---------- ---------- --------- Total interest expense 4,104.2 5,402.4 9,042.1 10,463.9 ---------- ---------- ---------- --------- NET INTEREST INCOME 7,387.2 7,477.9 14,864.8 14,769.9 Provision for loan losses 1,650.0 710.0 2,310.0 2,218.7 ---------- ---------- ---------- --------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,737.2 6,767.9 12,554.8 12,551.2 ---------- ---------- ---------- --------- NONINTEREST INCOME Service charges on deposit accounts 893.7 878.3 1,716.9 1,688.3 Trust & Investment fee income 1,144.2 1,173.9 2,313.5 2,388.1 Gains on securities transactions 50.6 -- 103.8 0.8 Income from loan sales and servicing 808.2 392.9 1,416.5 769.0 ATM, debit and credit card fee income 590.5 532.2 1,119.9 1,003.9 Income from bank-owned life insurance 117.9 116.4 233.4 222.0 Other income 161.3 244.6 400.2 475.3 ---------- ---------- ---------- --------- Total noninterest income 3,766.4 3,338.3 7,304.2 6,547.4 NONINTEREST EXPENSE Salaries and employee benefits 4,063.4 3,734.9 8,470.2 7,342.4 Occupancy and equipment expense 1,215.3 1,196.6 2,459.0 2,417.4 External data processing 459.9 431.8 875.8 723.1 Advertising and marketing 315.6 301.4 690.7 662.3 Other expense 1,193.8 1,325.7 2,554.4 2,534.9 ---------- ---------- ---------- --------- Total noninterest expense 7,248.0 6,990.4 15,050.1 13,680.1 ---------- ---------- ---------- --------- INCOME BEFORE FEDERAL INCOME TAX 2,255.6 3,115.8 4,808.9 5,418.5 Federal income tax 560.3 848.6 1,225.5 1,425.3 ---------- ---------- ---------- --------- NET INCOME $ 1,695.3 $ 2,267.2 $ 3,583.4 $ 3,993.2 ========== ========== ========== ========= Basic and diluted earnings per share $ 0.33 $ 0.43 $ 0.70 $ 0.75 (Earnings per share restated to reflect 2007 stock dividend)
4 UNITED BANCORP, INC. AND SUBSIDIARIES FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Quarter to Date ------------------------------------------------------ June 30, Change -------------------------- ------------------------- (Dollars in thousands except per share data) 2008 2007 Amount Percentage ------------ ----------- ----------- ----------- INCOME STATEMENT SUMMARY Interest income $ 11,491.4 $ 12,880.3 $ (1,388.9) -10.8% Interest expense 4,104.2 5,402.4 (1,298.2) -24.0% ------------ ----------- ----------- Net interest income 7,387.2 7,477.9 (90.7) -1.2% Provision for loan losses 1,650.0 710.0 940.0 132.4% Non-interest income 3,766.4 3,338.3 428.1 12.8% Non-interest expense 7,248.0 6,990.4 257.6 3.7% ------------ ----------- ----------- Income before taxes 2,255.6 3,115.8 (860.2) -27.6% Federal income tax 560.3 848.6 (288.3) -34.0% ------------ ----------- ----------- Net income $ 1,695.3 $ 2,267.2 $ (571.9) -25.2% ============ =========== =========== PERFORMANCE RATIOS Return on average assets (annualized) 0.86% 1.18% -0.32% -27.1% Return on average equity (annualized) 9.29% 12.11% -2.82% -23.3% Net interest margin (tax equivalent) 4.07% 4.22% -0.15% -3.5% Efficiency ratio 63.6% 63.2% 0.45% -0.7% BALANCE SHEET DATA Period-end: Portfolio loans $ 662,014 $ 634,056 $ 27,958 4.4% Allowance for loan loss 13,008 7,561 5,447 72.0% Deposits 669,054 656,866 12,188 1.9% Total assets 798,922 781,640 17,283 2.2% Average: Loans 664,895 630,439 34,456 5.5% Deposits 655,132 636,702 18,430 2.9% Earning assets 765,808 709,649 56,159 7.9% Total assets 797,715 768,165 29,550 3.8% ASSET QUALITY Net charge offs $ 689 $ 2,379 $ (1,690) -71.0% Non-accrual loans 15,716 7,261 8,455 116.4% Non-performing loans 17,528 7,514 10,014 133.3% Non-performing assets 20,263 8,672 11,591 133.7% Loans over 90 days past due/total loans 0.27% 0.04% 0.24% 644.2% Nonperforming loans/total loans 2.65% 1.19% 1.46% 123.4% Allowance for loan loss/total loans 1.96% 1.19% 0.77% 64.8% Allowance for loan loss/nonperforming loans 74.2% 100.6% -26.4% -26.2% STOCK PERFORMANCE Basic and diluted earnings per share $ 0.33 $ 0.43 $ (0.10) -23.1% Per-share closing price High $ 20.00 $ 24.00 $ (4.00) -16.7% Low 14.00 $ 21.75 (7.75) -35.6% End of period 15.00 $ 21.75 (6.75) -31.0% Shares outstanding 5,052,443 5,216,770 (164,327) -3.1% Dividends per share $ 0.20 $ 0.20 $ -- 0.0% Dividend payout ratio 60.6% 46.6% 13.99% 30.0% Price/earnings ratio (prior four quarters) 13.6x 13.4x 0.3x 2.0% Selling price/book value 103.2% 150.3% -47.1% -31.4% Book value per share $ 14.54 $ 14.47 $ 0.07 0.5%
All per-share data is restated to reflect 100% stock dividend in 2007 5 UNITED BANCORP, INC. AND SUBSIDIARIES FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Year to Date --------------------------------------------------- June 30, Change ------------------------- ----------------------- (Dollars in thousands except per share data) 2008 2007 Amount Percentage ----------- ----------- ---------- ---------- INCOME STATEMENT SUMMARY Interest income $ 23,906.9 $ 25,233.8 $ (1,326.9) -5.3% Interest expense 9,042.1 10,463.9 (1,421.8) -13.6% ----------- ----------- ---------- Net Interest Income 14,864.8 14,769.9 94.9 0.6% Provision for loan losses 2,310.0 2,218.7 91.3 4.1% Non-interest income 7,304.2 6,547.4 756.8 11.6% Non-interest expense 15,050.1 13,680.1 1,370.0 10.0% ----------- ----------- ---------- Income before taxes 4,808.9 5,418.5 (609.6) -11.3% Federal income tax 1,225.5 1,425.3 (199.8) -14.0% ----------- ----------- ---------- Net income $ 3,583.4 $ 3,993.2 $ (409.8) -10.3% =========== =========== ========== PERFORMANCE RATIOS Return on average assets (annualized) 0.90% 1.05% -0.15% -14.3% Return on average equity (annualized) 9.82% 10.75% -0.93% -8.7% Net interest margin (tax equivalent) 4.10% 4.23% -0.13% -3.2% Efficiency ratio 66.4% 62.7% 3.71% -5.9% BALANCE SHEET DATA Period-end: Portfolio loans $ 662,014 $ 634,056 $ 27,958 4.4% Allowance for loan loss 13,008 7,561 5,447 72.0% Deposits 669,054 656,866 12,188 1.9% Total assets 798,922 781,640 17,283 2.2% Average: Loans 659,923 630,439 29,484 4.7% Deposits 666,170 636,702 29,468 4.6% Earning assets 765,257 709,649 55,608 7.8% Total assets 802,997 768,165 34,832 4.5% ASSET QUALITY Net charge offs $ 1,611 $ 2,507 $ (896) -35.7% Non-accrual loans 15,716 7,261 8,455 116.4% Non-performing loans 17,528 7,514 10,014 133.3% Non-performing assets 20,263 8,672 11,591 133.7% Loans over 90 days past due/total loans 0.27% 0.04% 0.24% 644.2% Nonperforming loans/total loans 2.65% 1.19% 1.46% 123.4% Allowance for loan loss/total loans 1.96% 1.19% 0.77% 64.8% Allowance for loan loss/nonperforming loans 74.2% 100.6% -26.4% -26.2% STOCK PERFORMANCE Basic and diluted earnings per share $ 0.70 $ 0.75 $ (0.05) -7.2% Per-share closing price High $ 22.00 $ 24.00 $ (2.00) -8.3% Low 14.00 $ 21.75 (7.75) -35.6% End of period 15.00 $ 21.75 (6.75) -31.0% Shares outstanding 5,052,443 5,216,770 (164,327) -3.1% Dividends per share $ 0.40 $ 0.40 $ - $ 0.0% Dividend payout ratio 57.1% 53.1% 4.09% 7.7% Price/earnings ratio (prior four quarters) 13.6x 13.4x 0.3x 2.0% Selling price/book value 103.2% 150.3% -47.1% -31.4% Book value per share $ 14.54 $ 14.47 $ 0.07 0.5%
All per-share data is restated to reflect 100% stock dividend in 2007 6 UNITED BANCORP, INC. AND SUBSIDIARIES FINANCIAL SUMMARY & SELECTED RATIOS (UNAUDITED)
Quarter Ended ------------------------------------------------------------------------- June 30, March 31 December 31, September 30, June 30, (Dollars in thousands except per share data) 2008 2008 2007 2007 2007 ----------- ----------- -------------- -------------- ----------- INCOME STATEMENT SUMMARY Interest income $ 11,491.4 $ 12,415.5 $ 13,077.9 $ 13,322.4 $ 12,880.3 Interest expense 4,104.2 4,937.9 5,666.6 5,742.4 5,402.4 ----------- ----------- -------------- -------------- ----------- Net interest income 7,387.2 7,477.6 7,411.3 7,580.0 7,477.9 Provision for loan losses 1,650.0 660.0 5,801.0 617.5 710.0 Non-interest income 3,766.4 3,537.8 3,566.5 3,538.2 3,338.3 Non-interest expense 7,248.0 7,802.1 6,612.5 7,267.0 6,990.4 ----------- ----------- -------------- -------------- ----------- Income (loss) before taxes 2,255.6 2,553.3 (1,435.7) 3,233.7 3,115.8 Federal income tax 560.3 665.2 (685.8) 895.4 848.6 ----------- ----------- -------------- -------------- ----------- Net income (loss) $ 1,695.3 $ 1,888.1 $ (749.9) $ 2,338.3 $ 2,267.2 =========== =========== ============== ============== =========== PERFORMANCE RATIOS Return on average assets (annualized) 0.86% 0.94% -0.37% 1.18% 1.18% Return on average equity (annualized) 9.29% 10.35% -3.97% 12.32% 12.11% Net interest margin (tax equivalent) 4.07% 4.10% 4.06% 4.21% 4.22% Efficiency ratio 63.6% 69.3% 59.0% 64.0% 63.2% BALANCE SHEET DATA Period-end: Portfolio loans $ 662,014 $ 654,965 $ 644,530 $ 648,626 $ 634,056 Allowance for loan loss 13,008 12,047 12,306 7,714 7,561 Deposits 669,054 667,522 671,537 658,660 656,866 Total assets 798,922 797,874 795,687 788,297 781,640 Average: Loans 664,895 654,940 650,606 648,026 630,439 Deposits 655,132 677,023 665,498 654,216 636,702 Earning assets 765,808 768,288 758,261 748,878 733,693 Total assets 797,715 801,301 797,472 784,135 768,165 ASSET QUALITY Net charge offs $ 689 $ 919 $ 1,211 $ 464 $ 2,379 Non-accrual loans 15,716 13,253 13,695 7,467 7,261 Non-performing loans 17,528 16,235 15,150 8,999 7,514 Non-performing assets 20,263 18,626 17,415 10,978 8,672 Loans over 90 days past due/total loans 0.27% 0.46% 0.22% 0.23% 0.04% Nonperforming loans/total loans 2.65% 2.48% 2.35% 1.39% 1.19% Allowance for loan loss/total loans 1.96% 1.84% 1.91% 1.19% 1.19% Allowance/nonperforming loans 74.2% 74.2% 81.2% 85.7% 100.6% STOCK PERFORMANCE Basic and diluted earnings per share $ 0.33 $ 0.37 $ (0.15) $ 0.45 $ 0.43 Per-share closing price High $ 20.00 $ 22.00 $ 22.00 $ 22.50 $ 24.00 Low 14.00 17.00 17.00 20.20 21.75 End of period 15.00 18.00 17.00 20.75 21.75 Shares outstanding 5,052,443 5,084,943 5,092,230 5,133,444 5,216,770 Dividends per share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 Dividend payout ratio 60.6% 53.9% 137.9% 44.4% 46.6% Price/earnings ratio (prior four quarters) 13.6x 16.3x 16.1x 12.9x 13.4x Selling price/book value 103.2% 123.6% 118.6% 141.1% 150.3% Book value per share $ 14.54 $ 14.56 $ 14.33 $ 14.71 $ 14.47
All per-share data is restated to reflect 100% stock dividend in 2007 7