UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 20042005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM N/A TO N/A
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
incorporation or organization) Identification No.)
incorporation or organization)
201 SOUTH FOURTH STREET, MARTINS FERRY, OHIO 43935
- -------------------------------------------- ----------
(Address of principal executive offices) (ZIP Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (740) 633-0445
SECURITIES REGISTERED PURSUANT TO SECTION 12(B)12(b) OF THE ACT:
NONE N/A
---- ---
(Title of class) (Name of each exchange on which registered)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G)12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $1.00 A SHARE
-------------------------------------
(Title of class)
INDICATE BY CHECK MARK IF THE REGISTRANT IS A WELL-KNOWN SEASONED ISSUER, AS
DEFINED IN RULE 405 OF THE SECURITIES ACT. YES NO X .
----- -----
INDICATED BY CHECK MARK IF THE REGISTRANT IS NOT REQUIRED TO FILE REPORTS
PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE EXCHANGE ACT. YES NO X .
----- -----
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D)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]X NO
[ ]----- -----
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED TO THE BEST
OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. {X}(X)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A LARGE ACCELERATED FILER, AN
ACCELERATED FILER, OR A NON-ACCELERATED FILER. SEE DEFINITION OF 12B-2 OF THE
EXCHANGE ACT. (CHECK ONE):
LARGE ACCELERATED FILER ( ) ACCELERATED FILER ( ) NON-ACCELERATED FILER (X)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS A SHELL COMPANY (AS DEFINED IN
RULE 12B-2 OF THE EXCHANGE ACT RULE 12B-2)ACT). YES [ ] NO [X]X
----- -----
AS OF JUNE 30, 2005, THE AGGREGATE MARKET VALUE OF THE VOTING AND NON-VOTINGREGISTRANT'S COMMON EQUITYSTOCK
HELD BY NON-AFFILIATES OF THE REGISTRANT WAS $46,549,347 BASED ON THE CLOSING
SALE PRICE AS REPORTED ON THE NATIONAL ASSOCIATION OF SECURITIES DEALERS
AUTOMATED QUOTATION SYSTEM.
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF JUNE 30, 2004 WAS $46,327,776.THE LATEST PRACTICABLE DATE REGISTRANT HAD 3,780,9764,182,268 COMMON
SHARES OUTSTANDING AS OF MARCH 5, 2005.6, 2006.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE PROXY STATEMENT FOR THE ANNUAL SHAREHOLDERS MEETING TO BE HELD
APRIL 20, 200519, 2006 ARE INCORPORATED BY REFERENCE INTO PART III.
PORTIONS OF THE ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31,
20042005 ARE INCORPORATED BY REFERENCE INTO PARTS I AND II.
PART I
ITEM 1 BUSINESS
BUSINESS
United Bancorp, Inc. (Company) is a financial holding company
headquartered in Martins Ferry, Ohio. The Company has two wholly owned
subsidiary banks, The Citizens Savings Bank, Martins Ferry, Ohio
(CITIZENS) and The Community Bank, Lancaster, Ohio (COMMUNITY),
collectively "Banks".
The Banks are located in northeastern, eastern, southeastern and south
central Ohio and are engaged in the business of commercial and retail
banking in Belmont, Harrison, Tuscarawas, Carroll, Athens, Hocking,
and Fairfield counties and the surrounding localities. The Banks
provide a broad range of banking and financial services, which include
accepting demand, savings and time deposits and granting commercial,
real estate and consumer loans. CITIZENS conducts its business through
its main office in Martins Ferry, Ohio and nine branches located in
Bridgeport, Colerain, Dellroy, Dover, Jewett, New Philadelphia, St.
Clairsville, Sherrodsville, and Strasburg, Ohio. COMMUNITY conducts
its business through its seven offices in Amesville, Glouster,
Lancaster, and Nelsonsville, Ohio. COMMUNITY offers full service
brokerage service provided through UVEST(R) member NASD/SIPC.
The markets in which the Banks'Banks operate continue to be highly
competitive. CITIZENS competes for loans and deposits with other
retail commercial banks, savings and loan associations, finance
companies, credit unions and other types of financial institutions
within the Mid-Ohio valley geographic area along the eastern border of
Ohio, extending into the northern panhandle of West Virginia and the
Tuscarawas and Carroll County geographic areas of northeastern Ohio.
COMMUNITY also encounters similar competition for loans and deposits
throughout the Athens, Hocking, and Fairfield County geographic areas
of central and southeastern Ohio.
The Company is regulated under the Bank Holding Company Act of 1956,
as amended (the "BHC Act"), and is subject to the supervision and
examination of the Board of Governors of the Federal Reserve System
(the Federal Reserve Board). The BHC Act requires the prior approval
of the Federal Reserve Board for a bank holding company to acquire or
hold more than a 5% voting interest in any bank. The BHC Act allows
interstate bank acquisitions anywhere in the country and interstate
branching by acquisition and consolidation in those states that did
not opt out by January 1, 1997.
Other than as described more thoroughly below with respect to
activities that are "financial in nature," the Company is generally
prohibited by the Act from acquiring direct or indirect ownership or
control of more than five percent of the voting shares of any company
which is not a bank or bank holding company and from engaging directly
or indirectly in activities other than those of managing or
controlling banks or furnishing services to its subsidiaries.
On November 12,In 1999, the Gramm-Leach-Bliley Act (the "GLB Act") was enacted into
law. The GLB Act made sweeping changes with respect to the permissible
financial services, which various types of financial institutions may
now provide. The Glass-Steagall Act, which had generally prevented
banks from affiliation with securities and insurance firms, was
repealed. Pursuant to the GLB Act, bank holding companies may elect to
become a "financial holding company," provided that all of the
depository institution subsidiaries of the bank holding company are
"well capitalized" and "well managed" under applicable regulatory
standards. The Company has elected to be a financial holding company.
Under the GLB Act, a financial holding company may affiliate with
securities firms and insurance companies and engage in other
activities that are financial in nature. Activities that are
"financial in nature" include securities underwriting, dealing and
market-making, sponsoring mutual funds and investment companies,
insurance underwriting and agency, merchant banking, and activities
that the Federal Reserve Board has determined to be closely related to
banking.
The Company's banking subsidiaries are also subject to limitations
with respect to transactions with affiliates.
A substantial portion of the United Bancorp's cash revenues is derived
from dividends paid by its subsidiary banks. The subsidiary banks'
ability to pay dividends is subject to various legal and regulatory
constraints.
2
The Company's banking subsidiaries are subject to primary supervision,
regulation and examination by the Ohio DepartmentDivision of Financial
Institutions and the Federal Deposit Insurance Corporation (FDIC).
Federal regulators adopted risk-based capital guidelines and leverage
standards for banks and holding companies. A discussion of the impact
of risk-based capital guidelines and leverage standards is presented
in Note LM to the audited consolidated financial statements of United
Bancorp, Inc., captioned "Regulatory Capital."
The Financial Reform, Recovery and Enforcement Act of 1989 (FIRREA)
provides that a holding company's controlled insured depository
institutions are liable for any loss incurred by the Federal Deposit
Insurance Corporation in connection with the default of, or any
FDIC-assisted transaction involving an affiliated insured bank or
savings association.
Noncompliance with laws and regulations by financial holding companies
and banks can lead to monetary penalties and/or an increased level of
supervision or a combination of these two items. Management is not
aware of any current instances of material noncompliance with laws and
regulations and does not anticipate any problems maintaining
compliance on a prospective basis. Recent regulatory inspections and
examinations of United Bancorp, Inc. and its subsidiary banks have not
disclosed any material instances of noncompliance.
The earnings and growth of United Bancorp are affected not only by
general economic conditions, but also by the fiscal and monetary
policies of the federal government and its agencies, particularly the
Federal Reserve Board. The Federal Reserve Board's policies influence
the amount of bank loans and deposits and the interest rates charged
and paid thereon, and thus have an effect on earnings. The nature of
future monetary policies and the effect of such policies on the future
business and earnings of United Bancorp and its subsidiary banks
cannot be predicted.
The Banks have no single customer or related group of customers whose
banking activities, whether through deposits or lending, would have a
material impact on the continued earnings capabilities if those
activities were removed.
EMPLOYEES
The Company itself, as a holding company, has no compensated
employees. CITIZENS has 81 full time employees, with 19 of these
serving in a management capacity and 35 part time employees. COMMUNITY
has 32 full time employees, with 7 serving in a management capacity
and 18 part time employees. The Company considers employee relations
to be good at all subsidiary locations.
INDUSTRY SEGMENTS
United Bancorp and its subsidiaries are engaged in one line of
business, banking. Item 8 of this 10-K provides financial information
for United Bancorp's business.
United Bancorp's internet website is www.unitedbancorp.com.
I DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS EQUITY; INTEREST
RATES AND INTEREST DIFFERENTIAL
Refer to Management's Discussion and Analysis "Average Balances, Net
Interest Income and Yields Earned and Rates Paid" set forth at page 25
of our 20042005 Annual Report, which is incorporated by reference.
II INVESTMENT PORTFOLIO
A Securities available for sale at year-end 20042005 decreased $3,002,000,$15,870,000,
or 2.1% over 2003,11.5% from 2004, while securities held to maturity increased
$647,000,$5,314,000, or 4.2%35.5%. In our planning process, management's prediction
for 20042005 was for a steady to slightly rising interest rate
environment. In the first half of 2004,2005, interest rates actually
decreased to a level that caused a high volume of investment
securities to be called. Management reinvested the funds into the
Company's loan portfolio and a portion back into investment securities
over the course of 2004.
32005.
The following table sets forth the carrying amount of securities at December 31,
2005, 2004 2003 and 2002:2003:
DECEMBER 31,
----------------------------
(In thousands)------------------------------
2005 2004 2003 2002
-------- -------- --------
(In thousands)
AVAILABLE FOR SALE (AT MARKET)
U.S. Govt.US Government and agency obligations $ 75,483 $ 74,192 $ 81,298
$ 93,263
Mortgage-backed securities 35,440 42,706 35,872 14,075
Collaterallized35,782
Collateralized mortgage obligations 4,7822,230 4,783 2,982 999
State and municipal obligations 16,1188,769 16,117 20,642
20,714
OtherEquity securities 24 18 24 21
-------- -------- --------
$121,946 $137,816 $140,818 $129,072$140,720
======== ======== ========
HELD TO MATURITY (AT COST)
State and municipal obligations $ 20,262 $ 14,948 $ 15,594 $ 12,926
======== ======== ========
4
B Contractual maturities of securities at year-end 20042005 were as follows:
AVERAGE
AMORTIZED ESTIMATED TAX EQUIVALENT
AVAILABLE FOR SALE COST FAIR VALUE YIELD
------------ ------------ --------------- ------------------ --------- ---------- ---------------
(Dollars in Thousands)
US GOVERNMENT AGENCY OBLIGATIONS
1 - 5 Years1-5 years $ 1,499,7816,662 $ 1,496,595 3.73%
5 - 10 Years 25,878,340 25,870,073 4.55%6,501 4.02%
5-10 years 23,335 22,849 4.84%
Over 10 Years 47,466,697 46,825,015 5.32%
------------ ------------ ----years 47,439 46,133 5.39%
------- ------- -----
Total 74,844,818 74,191,683 5.02%
------------ ------------ ----77,436 75,483 4.68%
------- ------- -----
MORTGAGE-BACKED SECURITIES
1 - 5 Years 861,804 860,044 3.62%
5 - 10 Years 11,477,285 11,389,315 3.79%1-5 years 6,635 6,410 3.98%
5-10 years 3,820 3,691 4.03%
Over 10 Years 30,639,319 30,456,975 4.24%
------------ ------------ ----
42,978,408 42,706,334 4.22%
------------ ------------ ----
COLLATERIZEDyears 26,144 25,339 4.44%
------- ------- -----
Total 36,599 35,440 4.30%
------- ------- -----
COLLATERALIZED MORTGAGE OBLIGATION
1 - 5 Years 490,709 488,929 3.93%
5 - 10 Years 321,170 319,890 3.86%OBLIGATIONS
1-5 years 249 243 4.10%
5-10 years 499 478 3.55%
Over 10 Years 4,004,588 3,973,360 2.97%
------------ ------------ ----
4,816,467 4,782,179 3.13%
------------ ------------ ----years 1,553 1,509 4.12%
------- ------- -----
Total 2,301 2,230 4.00%
------- ------- -----
STATE AND MUNICIPAL OBLIGATIONS
Under 1 Year 472,245 473,986 4.93%
1 - 5 Years 730,750 774,423 6.89%
5 - 10 Years 6,443,682 6,506,911 8.05%45 45 8.71%
1-5 years 1,121 1,156 10.30%
5-10 years 4,529 4,447 8.04%
Over 10 Years 8,488,748 8,362,713 5.40%
------------ ------------ ----years 3,233 3,121 7.35%
------- ------- -----
Total 16,135,425 16,118,033 5.63%
------------ ------------ ----8,928 8,769 8.08%
------- ------- -----
OTHER SECURITIES
Equity securities 4,000 18,1004 24 0.00%
------------ ------------ ------------ -------- -----
TOTAL SECURITIES AVAILABLE FOR SALE $138,779,118 $137,816,329$125,268 $121,946 5.80%
============ ============ ============ ======== =====
HELD TO MATURITY
STATE AND MUNICIPAL OBLIGATIONS
Under 1 Year $ 710,2721,304 $ 722,415 7.62%
1 - 5 Years 2,440,849 2,571,536 7.20%
5 - 10 Years 4,671,363 4,916,720 6.78%1,319 10.90%
1-5 years 2,359 2,467 10.80%
5-10 years 5,099 5,193 9.86%
Over 10 Years 7,125,036 7,264,334 6.70%
------------ ------------ ----years 11,500 11,504 9.44%
-------- -------- -----
TOTAL SECURITIES HELD TO MATURITY $ 14,947,52020,262 $ 15,475,005 6.85%
============ ============ ====20,483 9.76%
======== ======== =====
5
C Excluding holdings of U.S. Agency obligations, there were no
investments in securities of any one issuer exceeding 10% of the
Company's consolidated shareholders' equity at December 31, 2004.2005.
III LOAN PORTFOLIO
A TYPES OF LOANS
The amounts of gross loans outstanding at December 31, 2005,
2004, 2003, 2002 2001 and 20002001 are shown in the following table
according to types of loans:
DECEMBER 31,
----------------------------------------------------------------------------------------------------
(In thousands) 2005 2004 2003 2002 2001 2000
-------- -------- -------- -------- --------
(In thousands)
Commercial loans $ 32,675 $ 35,309 $ 28,049 $ 21,060 $ 21,502
$ 20,415
Commercial real estate loans 97,706 83,103 68,902 69,287 61,963
64,812
Residential real estate loans 57,746 55,062 52,237 52,535 54,153
55,931
Installment loans 43,884 41,973 49,421 45,006 45,722 55,339
-------- -------- -------- -------- --------
Total loans $232,011 $215,447 $198,609 $187,888 $183,340 $196,497
======== ======== ======== ======== ========
Construction loans were not significant for the periods
discussed.at any date indicated
above.
B MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST
RATES
The following is a schedule of commercial and commercial real
estate loans at December 31, 20042005 maturing within the various
time frames indicated:
ONE YEAR ONE THROUGH AFTER
(In thousands) OR LESS FIVE YEARS FIVE YEARS TOTAL
-------- ----------- ---------- --------
Commercial loans $15,956 $ 17,1169,631 $ 7,9657,088 $ 10,228 $ 35,30932,675
Commercial real estate loans 38,948 37,629 6,526 83,10342,653 47,867 7,186 97,706
------- ------- ------- --------
Total $ 56,064 $ 45,594 $ 16,754 $118,412$58,609 $57,498 $14,274 $130,381
======= ======= ======= ========
The following is a schedule of fixed rate and variable rate
commercial and commercial real estate loans at December 31, 20042005
due to mature after one year:
FIXED VARIABLE
(In thousands) FIXED RATE VARIABLE RATE TOTAL > ONE YEAR
---------- -------------------- -------- ----------------
Commercial loans $ 8,301 $ 9,892 $ 18,1936,078 $10,641 $16,719
Commercial real estate loans 5,770 38,385 44,155
---------- ------------- ----------------6,101 48,952 55,053
------- ------- -------
Total $ 14,071 $ 48,277 $ 62,348
========== ============= ================$12,179 $59,593 $71,772
======= ======= =======
Variable rate loans are those loans with floating or adjustable
interest rates.
6
C RISK ELEMENTS
1. NONACCRUAL, PAST DUE, RESTRUCTURED AND IMPAIRED LOANS
The following schedule summarizes nonaccrual loans, accruing
loans which are contractually 90 days or more past due, and
impaired loans at December 31, 2005, 2004 2003 and 2002:2003:
DECEMBER 31,
- ----------------------------------------------------------------------------------------
(In thousands) 2005 2004 2003
2002
------ ------ ----------
Nonaccrual basis (1) $1,144 $1,106 $ 101 $ 685$101
Accruing loans 90 days or greater past due 417 500 655 85
Impaired loans (2) - - --- -- --
(1) There were no restructured loans at any of the dates indicated above.
(2) Loans considered impaired under the provisions of SFAS No. 114 and interest
recognized on a cash received basis were not considered material during any
of the periods presented.
The additional amount of interest income that would have been
recorded on nonaccrual loans, had they been current, totaled
$29,809, $907approximately $42,000, $30,000 and $ 6,270$1,000 for the years ended
December 31, 2005, 2004 2003 and 20022003.
Interest income is not reported when full loan repayment is
doubtful, typically when the loan is impaired or payments are
past due over 90 days. Payments received on such loans are
reported as principal reductions.
AThe allowance for loan losses is impaired when full payment undera valuation allowance for
probable incurred credit losses, increased by the provision for
loan terms is not
expected. Impairment is evaluated in total for smaller-balance
loanslosses and decreased by charge-offs less recoveries.
Management estimates the allowance balance required based on past
loan loss experience, the nature and volume of similar nature such as residential mortgage, consumer,the portfolio,
information about specific borrower situations and credit card loans,estimated
collateral values, economic conditions and on an individual loan basis for other loans. If a loan is impaired, a portionfactors.
Allocations of the allowance may be made for specific loans, but
the entire allowance is allocated soavailable for any loan that, in
management's judgment, should be charged-off. Loan losses are
charged against the allowance when management believes the
uncollectibility of a loan balance is reported, net, atconfirmed. The Company
accounts for impaired loans in accordance with SFAS No. 114,
"Accounting for Creditors for Impairment of a Loan." SFAS 114
requires that impaired loans be measured based upon the present
value of estimatedexpected future cash flows usingdiscounted at the loan's
existingeffective interest rate or, as an alternative, at the loan's
observable market price or fair value of the collateral. A loan
is defined under SFAS No. 114 as impaired when, based on current
information and events, it is probable that a creditor will be
unable to collect all amounts due according to the contractual
terms of the loan agreement. In applying the provisions of SFAS
No. 114, the Company considers its investment in one-to-four
family residential loans and consumer installment loans to be
homogenous and therefore excluded from separate identification
for evaluation of impairment. With respect to the Company's
investment in nonresidential and multi-family residential real
estate loans, and its evaluation of impairment thereof, such
loans are generally collateral dependent and, as a result, are
carried as a practical expedient at the fair value of collateral ifthe
collateral.
Collateral dependent loans which are more than ninety days
delinquent are considered to constitute more than a minimum delay
in repayment is expected solely
fromand are evaluated for impairment under SFAS No. 114
at that time.
At December 31, 2005 and 2004, the collateral.amount of the Company's
impaired loans were not material to the consolidated financial
statements.
2. POTENTIAL PROBLEM LOANS
The Company had no potential problem loans as of December 31,
20042005 which have not been disclosed in Table C 1., but where known
information about possible credit problems of borrowers causes
management to have serious doubts as to the ability of such
borrowers to comply with the present loan repayment terms and
which may result in disclosure of such loans into one of the
problem loan categories.
3. LOAN CONCENTRATIONS
Refer to Page 54,55, Note K of Notes to Consolidated Financial
Statements set forth in our 20042005 Annual Report, which is
incorporated herein by reference.
IV SUMMARY OF LOAN LOSS EXPERIENCE
For additional explanation of factors which influence management's
judgment in determining amounts charged to expense, refer Pages 18
and 19pages 16 of
the "Management"Management's Discussion and Analysis" and Notes to Consolidated
Financial Statements set forth in our 20042005 Annual Report, which is
incorporated herein by reference.
7
A ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
The following schedule presents an analysis of the allowance for
loan losses, average loan data and related ratios for the years
ended December 31, 2005, 2004, 2003, 2002 2001 and 2000:2001:
(In thousands)2005 2004 2003 2002 2001
2000
-------- -------- -------- -------- --------
(Dollars in thousands)
LOANS
Loans outstanding $232,011 $215,447 $198,608 $187,888 $183,340
$196,497
Average loans outstanding $224,945 $208,658 $192,725 $184,131 $187,995 $190,386
ALLOWANCE FOR LOAN LOSSES
Balance at beginning of year $ 2,843 $ 2,971 $ 2,879 $ 2,790 $ 3,110
Loan charge-offs:
Commercial 58 250 135 268 125
Commercial real estate - 79 45 - 79
Residential real estate 16 28 84 67 275
Installment 645 459 507 728 716
-------- -------- -------- -------- --------
Total loan charge-offs 719 816 771 1,063 1,195
-------- -------- -------- -------- --------
Loan recoveries
Commercial 4 3 17 27 2
Commercial real estate - - - - 28
Residential real estate 7 3 1 10 4
Installment 242 142 215 335 254
-------- -------- -------- -------- --------
Total loan recoveries 253 148 233 372 288
-------- -------- -------- -------- --------
Net loan charge-offs 466 668 538 691 907
Provision for loan losses 618 540 630 780 587
-------- -------- -------- -------- --------
Balance at end of year $ 2,995 $ 2,843 $ 2,971 $ 2,879 $ 2,790
Loan Charge-offs:
Commercial 89 58 250 135 268
Commercial real estate -- -- 79 45 --
Residential real estate 331 16 28 84 67
Installment 342 645 459 507 728
-------- -------- -------- -------- --------
Total loan charge-offs 762 719 816 771 1,063
-------- -------- -------- -------- --------
Loan recoveries
Commercial 7 4 3 17 27
Commercial real estate -- -- -- -- --
Residential real estate 50 7 3 1 10
Installment 202 242 142 215 335
-------- -------- -------- -------- --------
Total loan recoveries 259 253 148 233 372
-------- -------- -------- -------- --------
Net loan charge-offs 503 466 668 538 691
Provision for loan losses 412 618 540 630 780
-------- -------- -------- -------- --------
Balance at end of year $ 2,904 $ 2,995 $ 2,843 $ 2,971 $ 2,879
======== ======== ======== ======== ========
========
Ratio of net charge-offs to average loans 0.22% 0.22% 0.35% 0.29% 0.37%
-------- -------- -------- -------- --------
8
B ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
The following table allocates the allowance for possible loan losses
at December 31, 2005, 2004, 2003, 2002 2001 and 2000.2001. Management adjusts
the allowance periodically to account for changes in national trends
and economic conditions in the Banks' service areas. The allowance has
been allocated according to the amount deemed to be reasonably
necessary to provide for the probability of losses being incurred
within the following categories of loans at the dates indicated:
2005 2004 ---------------------2003 2002 2001
(Dollars in ---------------------- ---------------------- ---------------------- ---------------------- ----------------------
thousands) Allowance % OF LOANS
ALLOWANCE TO TOTAL
(In thousands) AMOUNT LOANSLoans to Allowance % Loans to Allowance % Loans to Allowance % Loans to Allowance % Loans to
Loan type Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans
- ----------- --------- --------------------- --------- ----------- --------- ----------- --------- ----------- --------- -----------
Loan type
Commercial $ 502 14.08% $ 530 16.39% Commercial real estate 1,136 38.57%
Residential real estate 313 25.56%
Installment 532 19.48%
Unallocated 484 N/A
--------- ------
Total $ 2,995 100.00%
========= ======
2003
---------------------
% OF LOANS
ALLOWANCE TO TOTAL
(In thousands) AMOUNT LOANS
--------- ----------
Loan type
Commercial $ 452 14.13% Commercial real estate 1,005 34.69%
Residential real estate 387 26.30%
Installment 982 24.88%
Unallocated 17 N/A
--------- ------
Total $ 2,843 100.00%
========= ======
2002
---------------------
% OF LOANS
ALLOWANCE TO TOTAL
(In thousands) AMOUNT LOANS
--------- ----------
Loan type
Commercial $ 361 11.21%
Commercial real estate 965 36.88%
Residential real estate 403 27.96%
Installment 879 23.95%
Unallocated 363 N/A
--------- ------
Total $ 2,971 100.00%
========= ======
2001
---------------------
% OF LOANS
ALLOWANCE TO TOTAL
(In thousands) AMOUNT LOANS
--------- ----------
Loan type
Commercial $ 325 11.73%
Commercial
real estateReal
Estate 1,092 42.11% 1,136 38.57% 1,005 34.69% 965 36.88% 872 33.80%
Residential
real estateReal
Estate 310 24.89% 313 25.56% 387 26.30% 403 27.96% 381 29.54%
Installment 739 18.92% 532 19.48% 982 24.88% 879 23.95% 613 24.93%
Unallocated 261 N/A 484 N/A 17 N/A 363 N/A 688 N/A
--------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
Total $ 2,879$2,904 100.00% =========$2,995 100.00% $2,843 100.00% $2,971 100.00% $2,879 100.00%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
2000
---------------------
% OF LOANS
ALLOWANCE TO TOTAL
(In thousands) AMOUNT LOANS
--------- ----------
Loan type
Commercial $ 263 10.39%
Commercial real estate 835 32.98%
Residential real estate 461 28.46%
Installment 781 28.17%
Unallocated 450 N/A
--------- ------
Total $ 2,790 100.00%
========= ======
9
V DEPOSITS
A SCHEDULE OF AVERAGE DEPOSIT AMOUNTS AND RATES
Refer to Management's Discussion and Analysis and Results of
Operations "Average Balances, Net Interest Income and Yields
Earned and Rates Paid" set forth in our 20042005 Annual Report and
incorporated herein by reference.
B MATURITY ANALYSIS OF TIME DEPOSITS GREATER THAN $100,000.
ReferThe time to Note Eremaining maturity for time deposits in excess of
Notes to Consolidated Financial Statements set
forth in our 2004 Annual Report and incorporated herein by
reference.$100,000 are:
2005
-------
(Dollars in thousands)
Less than 3 months $10,961
Over 3 through 6 months 3,489
Over 6 through 12 months 10,082
Over 12 months 14,591
-------
Totals $39,123
=======
VI RETURN ON EQUITY AND ASSETS
Our dividend payout ratio and equity to assets ratio:
DECEMBER 31,
-----------------------------
2005 2004 2003 2002
---- ---- --------- ----- ----- -----
Dividend Payout Ratio 56.47% 45.74%60.76% 55.84% 45.88% 50.00%
Equity to Assets 7.88% 8.26% 8.43% 8.89%
For other ratios refer to the inside front cover of our 20042005 Annual
Report to Shareholders, incorporated herein by reference.
VII SHORT-TERM BORROWINGS
Information concerning securities sold under agreements to repurchase
is summarized as follows:
(In thousands)2005 2004 2003
2002------- ------- -------
(In thousands)
Balance at December 31 $ 7,142 $12,612 $ 5,485 $ 7,010
Weighted average interest rate at December 31 0.92% 0.80% 0.91%2.58% 0.96% 0.81%
Average daily balance during the year $10,129 $ 9,013 $ 8,766 $ 8,567
Average interest rate during the year 0.96%2.96% 0.92% 0.83% 1.14%
Maximum month-end balance during the year $14,555 $12,632 $13,980 $11,659
Securities sold under agreements to repurchase are financing
arrangements whereby the Company sells securities and agrees to
repurchase the identical securities at the maturities of the
agreements at specified prices.
Information concerning the cash management line of credit from the
Federal Home Loan Bank of Cincinnati, Ohio is summarized as follows:
(In thousands)2005 2004 2003
2002
------- ------- ----------------
(In thousands)
Balance at December 31 $35,000 $32,500 $15,283 $ -
Weighted average interest rate at December 31 2.42%3.62% 2.70% 1.11% 0.00%
Average daily balance during the year $27,217 $29,466 $ 7,103
$ 1,722
Average interestinterst rate during the year 3.44% 1.90% 1.45% 1.83%
Maximum month-end balance during the year $36,057 $36,895 $15,283 $ 6,799
No other individual component of the borrowed funds total comprised more than
30% of shareholders' equity and accordingly is not disclosed in
detail.
10
SUPPLEMENTAL ITEM - EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the following
information on the executive officers of the Company is included as an
additional item in Part I:
Executive Officers Positions held
Name Age with Company;
Name Age Business Experience
- -------------------------- --- ------------------------------------------------------------------------------------------------------
James W. Everson 6667 Chairman, President and Chief Executive Officer
Alan M. Hooker 53 Executive Vice President - Administration
Scott Everson 3738 Senior Vice President and Chief Operating Officer
Randall M. Greenwood 4142 Senior Vice President and Chief Financial
Officer, Treasurer
James A. Lodes 5859 Vice President - Lending
Norman F. Assenza, Jr. 5859 Vice President - Operations and Secretary
Michael A. Lloyd 3637 Vice President - Information Systems
Each individual has held the position noted during the past five
years, except for the following:
Scott A. Everson served as President and Chief Operating Officer from
April 2002 to November 2004 and Senior Vice President, Operations and
Retail Banking, of The Citizens Savings Bank from May 1999 to April
2002.
Prior to that he served Assistant Vice President/Branch Manager
Bridgeport Office from 1997 to May 1999. In addition, he is currently
President and Chief Executive Office and a Director of The Citizens
Savings Bank. He has held this position since November 2004.
Michael A. Lloyd served as Senior Vice President Management
Information Systems from October 1999 to April 2002 of the Citizens
Savings Bank and prior to that he served as Vice President Management
Information Systems from April 1999 to October 1999. He served as Data
Processing Manager from 1994 to April 1999 for The Citizens Savings
Bank.
Each of these Executive Officers are serving at-will in their current
positions. The Officers have held the positions for the following time
periods: James W. Everson, 22 years, Alan M. Hooker,
623 years, Norman F. Assenza, Jr., 2223 years,
James A. Lodes, 910 years, and Randall M. Greenwood, 78 years.
ITEM 1A. RISK FACTORS
An investment in the Company's common stock is subject to risks inherent to
the Company's business. The material risks and uncertainties that
Management believes affect the Company are described below. Before making
an investment decision, investors should carefully consider the risks and
uncertainties described below together with all the other information
included or incorporated by reference in this report. The risks and
uncertainties described below are not the only ones facing the Company.
Additional risks and uncertainties that Management is not aware of or
focused on or that Management currently deems immaterial may also impair
the Company's business operations. This report is qualified in its entirety
by these risk factors.
If any of the following risks actually occur, the Company's financial
condition and results of operations could be materially and adversely
affected. If this were to happen, the value of the Company's common stock
could decline significantly, and investors would lose all or part of their
investment.
RISKS RELATED TO THE COMPANY'S BUSINESS
INTEREST RATE RISK - The Company's earnings and cash flows are largely
dependent upon its net interest income. Net interest income is the
difference between interest income earned on interest earning assets such
as loans and securities and interest income paid on interest bearing
liabilities such as deposits and borrowings. Interest rates are highly
sensitive to many factors that are beyond the Company's control, including
general economic and market conditions and policies of various governmental
and regulatory agencies and, in particular, the Board of Governors of the
Federal Reserve System. Changes in monetary policy, including changes in
interest rates, could influence not only the interest the Company receives
on loans and investment securities and the amount of interest it pays on
deposits and borrowings, but such changes could also affect the Company's
ability to originate loans and obtain deposits and the fair values of the
Company's financial assets and liabilities. If the interest rates paid on
deposits and other borrowings increase at a faster rate or decrease at a
slower rate than the interest rates received on loans and investments, the
Company's net interest income, and therefore earnings, could be adversely
affected.
Although Management believes it has implemented effective asset and
liability management strategies to reduce the potential effects of changes
in interest rates on the Company's results of operations, any substantial,
unexpected, or prolonged change in market interest rates or in the term
structure of interest rates could have a material adverse effect on the
Company's financial condition and results of operations. See Item 7A.
Quantitative and Qualitative Disclosures about Market Risk in this report
for further discussion related to the Company's management if interest rate
risk.
LENDING RISK - There are inherent risks associated with the Company's
lending activities. These risks include, among other things, the impact of
changes in interest rates and changes in economic conditions in the markets
where the Company operates as well as those across the State of Ohio and
the United States. Increases in interest rates and/or weakening economic
conditions could adversely impact the ability of borrowers to repay
outstanding loans or the value of the collateral securing these loans. The
Company is also subject to various laws and regulations that affect its
lending activities. Failure to comply with applicable laws and regulations
could subject the Company to regulatory enforcement action that could
result in the assessment of significant civil money penalties against the
Company.
The Company maintains an Allowance for Loan Losses, which is a reserve
established through a provision for loan losses charged to expense, that
represents Management's best estimate of probable loan losses that have
been incurred within the existing portfolio of loans. The Allowance, in the
judgment of Management, is necessary to reserve for estimated loan losses
and risks inherent in the loan portfolio. The level of the Allowance
reflects Management's continuing evaluation of loan loss experience,
current loan portfolio quality, present economic, political, and regulatory
conditions, and unidentified losses inherent in the current loan portfolio.
The determination of the appropriate level of the Allowance inherently
involves a high degree of subjectivity and requires the Company to make
significant estimates of current credit risks and future trends, all of
which may undergo material changes. Changes in economic conditions
affecting borrowers, new information regarding existing loans,
identification of additional problem loans, and other factors, both within
and outside of the Company's control, may require an increase in the
Allowance. In addition, bank regulatory agencies
periodically review the Company's Allowance and may require an increase in
the provision for loan losses or the recognition of further loan
charge-offs, based on judgments different from those of Management.
ECONOMIC RISK - The Company's success depends significantly on the general
economic conditions of Southeastern and Central Ohio. Unlike larger
regional or national banks that are more geographically diversified, the
Company provides banking and financial services to customers primarily in
Southeast and Central Ohio and Northeast West Virginia. The local economic
conditions in these areas have a significant impact on the demand for the
Company's products and services as well as the ability of the Company's
customers to repay loans, the value of the collateral securing loans, and
the stability of the Company's deposit funding sources. A significant
decline in general economic conditions caused by inflation, recession, acts
of terrorism, unemployment, changes in securities markets or other factors
could impact these local economic conditions and, in turn, have a material
adverse effect on the Company's financial condition and results of
operations.
COMPETITIVE RISK - The Company faces substantial competition in all areas
of its operations from a variety of different competitors, many of which
are larger and may have more financial resources. Such competitors
primarily include regional and national banks within the market the Company
operates. The Company also faces competition from many other types of
financial institutions, including savings and loan institutions, credit
unions, finance companies, brokerage firms, insurance companies, and other
financial intermediaries. The financial services industry could become even
more competitive as a result of legislative, regulatory, and technological
changes and continued consolidation. Banks, securities firms, and insurance
companies can merge under the umbrella of a financial holding company,
which can offer virtually any type of financial service, including banking,
securities underwriting, and insurance. Also, technology has lowered
barriers to entry and made it possible for non-banks to offer products and
services traditionally provided by banks, such as automatic transfer and
automatic payment systems. Many of the Company's competitors have fewer
regulatory constraints, and may have lower cost structures. Additionally,
many competitors may be able to achieve economies of scale, and as a
result, may offer a broader range of products and services as well as
better pricing for those products and services than the Company can.
Increased competition could adversely affect the Company's growth and
profitability, which, in turn, could have a material adverse effect on the
Company's financial condition and results of operations.
REGULATORY RISK - The Company is subject to extensive federal and state
regulation and supervision. Banking regulations are primarily intended to
protect depositors' funds, federal deposit insurance funds, and the banking
system as a whole, not shareholders. These regulations affect the Company's
lending practices, capital structure, investment practices, dividend
policy, and growth, among other things. Congress and federal regulatory
agencies continually review banking laws, regulations, and policies for
possible changes. Changes to statutes, regulations, or regulatory policies,
including changes in interpretation or implementation of statutes,
regulations, or policies, could affect the Company in substantial and
unpredictable ways. Such changes could subject the Company to additional
costs, limit the types of financial services and products the Company may
offer and/or increase the ability of non-banks to offer competing financial
products and services, among other things. Failure to comply with laws,
regulations, or policies could result in sanctions by regulatory agencies,
civil money penalties, and/or reputation damage, which could have a
material adverse effect on the Company's business, financial condition, and
results of operations. While the Company has policies and procedures
designed to prevent any such violations, there can be no assurance that
such violations will not occur.
FAILURE OR CIRCUMVENTION OF CONTROLS AND PROCEDURES - Management regularly
reviews and updates the Company's internal controls, disclosure controls,
and procedures, and corporate governance policies and procedures. Any
system of controls, however well designed and operated, is based in part on
certain assumptions and can provide only reasonable, not absolute,
assurances that the objectives of the system are met. Any failure or
circumvention of the Company's controls and procedures or failure to comply
with regulations related to controls and procedures could have a material
adverse effect on the Company's business, results of operations, and
financial condition.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2 PROPERTIES
The Company owns and operates its Main Office in Martins Ferry, Ohio and
the following offices:
Location
Location- --------
Bridgeport, Ohio Owned Sherrodsville, Ohio Owned
Colerain, Ohio Owned
Glouster, Ohio Owned
Jewett, Ohio Owned Glouster, Ohio Owned
St. Clairsville, Ohio Leased
Amesville, Ohio Owned
Dover, Ohio Owned
Nelsonville, Ohio Owned
Dellroy, Ohio Owned Lancaster, Ohio Owned
New Philadelphia, Ohio Owned
Strasburg, Ohio Owned
Sherrodsville, Ohio Owned
Glouster, Ohio Owned
Glouster, Ohio Owned
Amesville, Ohio Owned
Nelsonville, Ohio Owned
Lancaster, Ohio Owned
Strasburg,Lancaster, Ohio Owned
Lancaster, Ohio Owned
Management believes the properties described above to be in good operating
condition for the purpose for which it isthey are used. The properties are
unencumbered by any mortgage or security interest and is, in management's
opinion, adequately insured.
11
ITEM 3 LEGAL PROCEEDINGS
There are no material legal proceedings, other than ordinary routine
litigation incidental to its business, to which the Company or its
subsidiaries is a party or to which any of its property is subject.
United Bancorp and its subsidiaries have not been required to pay a penalty
to the IRS for failing to make disclosures with respect to certain
transactions that have been identified by the IRS as abusive or that have a
significant tax avoidance purpose.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to shareholders for a vote during the fourth
quarter of 2004.2005.
PART II
ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Refer to Page 7, "Shareholder Information" of the 20042005 Annual Report To
Shareholders and refer to Page 55,43, Note NA, Number 19, of the 2004Notes to the
Consolidated Financial Statements of the Company in the 2005 Annual Report
To Shareholders for common stock trading ranges, cash dividends declared
and information relating to dividend restrictions, which are incorporated
herein by reference.
ISSUER PURCHASES OF EQUITY SECURITIES
(C) (D)
TOTAL NUMBER OF MAXIMUM NUMBER (OR
(A) SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE)
TOTAL NUMBER OF (B) PURCHASED AS PART OF OF SHARES (OR UNITS) THAT
SHARES (OR UNITS) AVERAGE PRICE PAID PUBLICLY ANNOUNCED MAY YET BE PURCHASED UNDER
PERIOD PURCHASED PER SHARE (OR UNIT) PLANS OR PROGRAMS THE PLANS OR PROGRAMS
------ ----------------- ------------------- -------------------- --------------------------
Month #l
10/1/2005 to
10/31/2005
Month #2
11/1/2005 to
11/30/2005
Month #3
12/1/2005 to 27,500 $11.95 27,500 $1,671,000
12/31/2005
------ ------ ------ ----------
Total 27,500 $11.95 27,500 $1,671,000
====== ====== ====== ==========
UNITED BANCORP PURCHASED THESE SHARES UNDER A STOCK PURCHASE PROGRAM PUBLICLY
ANNOUNCED BY A PRESS RELEASE ISSUED ON NOVEMBER 16, 2005, UNDER WHICH ITS BOARD
OF DIRECTORS AUTHORIZED MANAGEMENT TO CAUSE THE COMPANY TO PURCHASE UP TO $2
MILLION OF ITS COMMON SHARES OVER A TWO-YEAR PERIOD. SUCH AUTHORIZATION WILL
EXPIRE ON NOVEMBER 15, 2007.
ITEM 6 SELECTED CONSOLIDATED FINANCIAL DATA
Refer to inside front cover, "Decade of Progress" of the 20042005 Annual Report
To Shareholders, which is incorporated herein by reference.
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Refer to Pages 14-28, "Management's Discussion and Analysis" of the 20042005
Annual Report To Shareholders.
CRITICAL ACCOUNTING POLICY
The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America
and follow general practices within the financial services industry. The
application of these principles requires management to make certain
estimates, assumptions and judgements that affect the amounts reported in
the financial statements and footnotes. These estimates, assumptions and
judgements 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 judgements.
The procedures for assessing the adequacy of the allowance for loan losses
reflect our evaluations of credit risk after careful consideration of all
information available to management. In developing this assessment,
management must rely on estimates and exercise judgement regarding matters
where the ultimate outcome is unknown such as economic factors, development
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 to determine whether the
amount is considered adequate to absorb probable losses. This evaluation
includes specific loss estimates on certain individually reviewed loans,
statistical losses, 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
judgement is a review of each bank's trend in delinquencies and loan
losses, and economic factors.
The allowance for loan loss is maintained at a level believed adequate by
management to absorb probable losses inherent in the loan portfolio.
Management's evaluation of the adequacy of the allowance is an estimate
based on management's current judgement about the credit quality of the
loan portfolio. While the Company strives to reflect all known risk factors
in its evaluation, judgement errors may occur.
12
The following table sets forth the Company's contractual obligations at December
31, 2004:2005:
PAYMENT DUE BY PERIOD
-------------------------------------------------------
LESS THAN MORE THAN
CONTRACTUAL OBLIGATIONS TOTAL 1 YEAR 1-3 YEARS 3-5 YEARS 5 YEARS
- ----------------------- ------- --------- --------- --------- ---------
Long term debt obligations $46,680,311 $34,640,410 $ 7,844,632 $ 1,244,731 $ 2,950,538$47,334 $36,483 $7,181 $1,270 $2,400
Operating lease obligations 39,452 18,000 21,452 - -
Securities sold under agreements
to repurchase 12,612,270 12,612,270 - - -
Federal funds purchased 3,180,000 3,180,000 - - -
Other borrowed funds 399,283 399,283 - - -18 18 -- --
Loan and standby letters
of credit commitments 28,936,689 28,936,689 - - -
----------- ----------- ----------- ----------- -----------32,500 32,500 -- -- --
------- ------- ------ ------ ------
Total $91,848,005 $79,786,652 $ 7,866,084 $ 1,244,731 $ 2,950,538
=========== =========== =========== =========== ===========$79,852 $69,001 $7,181 $1,270 $2,400
======= ======= ====== ====== ======
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Refer to Page 21-23 "Asset/Liability Management and Sensitivity to Market
Risks" of the 20042005 Annual Report to Shareholders, which is incorporated
herein by reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to Page 29-5829-60 of the 20042005 Annual Report To Shareholders, which is
incorporated herein by reference.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not applicable.
ITEM 9A 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 as of December 31,
2004,2005, 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 December 31, 2004,2005, in timely alerting them to material
information relating to the Company (including its consolidated
subsidiaries) 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
December 31, 20042005 that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.
ITEM 9B OTHER INFORMATION
None.
13
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning executive officers of the Company is set forth in
Part I, "Supplemental Item - Executive Officers of Registrant." Other
information responding to this Item 10 is included in the Registrant's
Proxy Statement for the 20052006 Annual Meeting of Shareholders and is
incorporated by reference under the captions "Proposal 1 - Election of
Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance",
on pages 67 through 1011 and page 17,24, respectively. Information concerning Thethe
Audit Committee Financial Expert is included in the Registrant's Proxy
Statement for the 20052006 Annual Meeting of Shareholders under the caption
"Committees of the Board - Audit Committee", pagespage 8 through
9 and is incorporated
herein by reference.
The Company's Board of Directors has adopted a Code of Ethics that applies
to its Principal Executive, Principal Financial, and Principal Accounting
Officers. A copy of the Company's Code of Ethics is posted and can be
viewed on the Company's internet web site at http://www.unitedbancorp.com/.www.unitedbancorp.com.
In the event the Company amends or waives any provision of its Code of
Ethics which applies to its Principal Executive, Principal Financial, or
Principal Accounting Officers, and which relates to any element of the code
of ethics definition set forth in Item 406(b) of Regulation S-K, the
Company shall post a description of the nature of such amendment or waiver
on its internet web site. With respect to a waiver of any relevant
provision of the code of ethics, the Company shall also post the name of
the person to whom the waiver was granted and the date of the waiver grant.
ITEM 11 EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference from the
captions titled "Executive Compensation and Other Information" and
"Compensation Committee Interlocks and Insider Participation in
Compensation Decisions" on pages 10 through 14 and
pages 15 and 16 respectively, of the Registrant's Proxy Statement for 20052006 Annual
Meeting of Shareholders.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCK HOLDER MATTERS
The information contained on pages 2 through 3 ofin the Registrant's Proxy Statement for the 20052006
Annual Meeting of Shareholders relating
tounder the caption "Ownership of Voting
Shares" is incorporated herein by reference.
The following table is a disclosure of securities authorized for issuance
under equity compensation plans:
EQUITY COMPENSATION PLAN INFORMATION
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES TO BE WEIGHTED-AVERAGE EXERCISE FUTURE ISSUANCE UNDER EQUITY
ISSUED UPON EXERCISE OF PRICE OF OUTSTANDING COMPENSATION PLANS
OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND (EXCLUDING SECURITIES
WARRANTS AND RIGHTS RIGHTS REFLECTED IN COLUMN (A)
Number of securities remaining
Number of securities to be available for future issuance
issued upon exercise of Weighted-average exercise price under equity compensation plans
outstanding options, warrants of outstanding options, (excluding securities reflected
and rights warrants and rights in column (a))
-------------------------- ------------------------- --------------------------------------------------------- ------------------------------- -------------------------------
EQUITY COMPENSATION
PLANS APPROVED BY
SECURITY HOLDERS 106,845 $9.57Equity compensation plans
approved bysecurity holders 94,609 $11.51 0
EQUITY COMPENSATION
PLANS NOT APPROVED BY
SECURITY HOLDERS
TOTAL 106,845 $9.57Equity compensation plans not
approved by security holders
------ ------ ---
Total 94,609 $11.51 0
====== ====== ===
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference from the
caption titled "Compensation Committee Interlocks and Insider Participation
in Compensation Decisions" and "Certain Transactions" on pages 15 and 16 ofin the Registrant's
Proxy Statement for the 20052006 Annual Meeting of Shareholders.
14
ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference from the
section under the caption titled "Principal Accounting Firm Fees" on page 10 of the
Registrant's Proxy Statement for the 20052006 Annual Meeting of Shareholders.
PART IV
ITEM 15 EXHIBITS AND FINANCIAL STATEMENTS/STATEMENT/SCHEDULES
FINANCIAL STATEMENTS
(a) The following Consolidated Financial Statements and related Notes to
Consolidated Financial Statements, together with the report of
Independent Registered Public Accounting Firm dated January 14, 2005,February 28, 2006,
appear on pages 29 through 5860 of the United Bancorp, Inc. 20042005 Annual
Report and are incorporated herein by reference.
1. Financial Statements
Consolidated Statements of Financial Condition
December 31, 20042005 and 20032004
Consolidated Statements of Earnings for the Years Ended
December 31, 2005, 2004 2003 and 20022003
Consolidated Statements of Shareholders' Equity for the Years
Ended December 31, 2005, 2004 2003 and 20022003
Consolidated Statements of Cash Flows for the Years Ended
December 31, 2005, 2004 203 and 20022003
Notes to Consolidated Financial Statements for the Years Ended
December 31, 2005, 2004 2003 and 20022003
Report of Independent Registered Public Accounting Firm
2. Financial Statement Schedules
Financial statement schedules are omitted as they are
not required or are not applicable or because the
required information is included in the consolidated
financial statements or notes thereto.
3. Exhibits required by Item 601 Regulation S-K
Reference is made to the Exhibit Index of this Form
10-K.
(b) Exhibits required by Item 601 Regulation S-K
(c) See Item 15(a) (3) above.
15
UNITED BANCORP INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant) United Bancorp, Inc.
By: /s/James W. Everson March 29, 2004
-------------------------------------------------
James W. Everson, Chairman, President & CEO
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/James W. Everson March 29, 2004
-------------------------------------------------
James W. Everson, Chairman, President & CEO
By: /s/Randall M. Greenwood March 29, 2004
-------------------------------------------------
Randall M. Greenwood, Senior Vice President & CFO
By: /s/Michael J. Arciello March 29, 2004
-------------------------------------------------
Michael J. Arciello, Director
By: /s/Terry A. McGhee March 29, 2004
-------------------------------------------------
Terry A. McGhee, Director
By: /s/John M. Hoopingarner March 29, 2004
-------------------------------------------------
John M. Hoopingarner, Director
By: /s/Richard L. Riesbeck March 29, 2004
-------------------------------------------------
Richard L. Riesbeck, Director
By: /s/L.E. Richardson, Jr. March 29, 2004
-------------------------------------------------
L.E. Richardson, Jr. , Director
By: /s/Matthew C. Thomas March 29, 2004
-------------------------------------------------
Matthew C. Thomas, Director
16
EXHIBIT INDEXEXHIBITS
Exhibit Number Exhibit Description
- -------------- -------------------
3.1 Amended Articles of Incorporation (1)
3.2 Amended Code of Regulations (2)
10.1 James W. Everson Change in Control Agreement (3)
10.2 Randall M. Greenwood Change in Control agreement (3)
10.3 Alan M. Hooker Change in Control Agreement (3)
10.4 Scott A. Everson Change in Control Agreement (3)
10.510.4 Norman F. Assenza Change in Control Agreement (3)
10.610.5 James A. Lodes Change in Control Agreement (3)
10.710.6 Michael A. Lloyd Change in Control Agreement (3)
10.7 United Bancorp, Inc. Stock Option Plan (4)
10.8 United Bancorp, Inc. and Subsidiaries Director Supplemental
Life Insurance Plan, covering Messrs. Hoopingarner, McGehee,
Riesbeck and Thomas. (5)
10.9 United Bancorp, Inc. and Subsidiaries Senior Executive
Supplemental Life Insurance Plan, covering James W. Everson,
Alan M. Hooker, Scott A. Everson, Randall M. Greenwood, Norman
F. Assenza, Michael A. Lloyd and James A. Lodes. (5)
10.10 United Bancorp, Inc. and United Bancorp, Inc. Affiliate Banks
Directors Deferred Compensation Plan. (5)
10.11 Amended and Restated Trust Agreement among United Bancorp, Inc.
Stock Option Plan (4)as Depository, Wilmington Trust Company, as Property Trustee,
Wilmington Trust Company, as Delaware Trustee, and
Administrative Trustees, dated as of November 17, 2005.
10.12 Junior Subordinated Indenture between United Bancorp, Inc. and
Wilmington Trust Company, as Trustee, dated as of November 17,
2005.
10.13 Guaranty Agreement between United Bancorp, Inc., as Guarantor,
and Wilmington Trust Company, as Guarantee Trustee, dated as of
November 17, 2005.
13 20042005 Annual Report
21 Subsidiaries of the Registrant (5)
23 Consent of Grant Thornton, LLP
31.1 Rule 13a-14(a) Certification - CEO
31.2 Rule 13a-14(a) Certification - CFO
32.1 Section 1350 Certification - CEO
32.2 Section 1350 Certification - CFO
(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.
(3) Incorporated by reference to the registrant's 10-K filed with the
Securities and Exchange Commission on March 27, 2003.
(4) Incorporated by reference to Exhibit A to the registrant's Definitive Proxy
Statement filed with the Securities and Exchange Commission on March 11,
1996.
(5) Incorporated by reference to the registrant's 10-K filed with the
Securities and Exchange Commission on March 29, 2004.
UNITED BANCORP INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant) United Bancorp, Inc.
By: /s/ James W. Everson March 29, 2004
---------------------------------
James W. Everson, Chairman,
President & CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By: /s/ James W. Everson March 29, 2006
---------------------------------
James W. Everson, Chairman,
President & CEO
By: /s/ Randall M. Greenwood March 29, 2006
---------------------------------
Randall M. Greenwood, Senior Vice
President & CFO
By: /s/ Michael J. Arciello March 29, 2006
---------------------------------
Michael J. Arciello, Director
By: /s/ Terry A. McGhee March 29, 2006
---------------------------------
Terry A. McGhee, Director
By: /s/ John M. Hoopingarner March 29, 2006
---------------------------------
John M. Hoopingarner, Director
By: /s/ Richard L. Riesbeck March 29, 2006
---------------------------------
Richard L. Riesbeck, Director
By: /s/ L.E. Richardson, Jr. March 29, 2006
---------------------------------
L.E. Richardson, Jr., Director
By: /s/ Matthew C. Thomas March 29, 2006
---------------------------------
Matthew C. Thomas, Director
EXHIBIT INDEX
Exhibit Number Exhibit Description
- -------------- -------------------
3.1 Amended Articles of Incorporation (1)
3.2 Amended Code of Regulations (2)
10.1 James W. Everson Change in Control Agreement (3)
10.2 Randall M. Greenwood Change in Control agreement (3)
10.3 Scott A. Everson Change in Control Agreement (3)
10.4 Norman F. Assenza Change in Control Agreement (3)
10.5 James A. Lodes Change in Control Agreement (3)
10.6 Michael A. Lloyd Change in Control Agreement (3)
10.7 United Bancorp, Inc. Stock Option Plan (4)
10.8 United Bancorp, Inc. and Subsidiaries Director Supplemental
Life Insurance Plan, covering Messrs. Hoopingarner, McGehee,
Riesbeck and Thomas. (5)
10.9 United Bancorp, Inc. and Subsidiaries Senior Executive
Supplemental Life Insurance Plan, covering James W. Everson,
Alan M. Hooker, Scott A. Everson, Randall M. Greenwood, Norman
F. Assenza, Michael A. Lloyd and James A. Lodes. (5)
10.10 United Bancorp, Inc. and United Bancorp, Inc. Affiliate Banks
Directors Deferred Compensation Plan. (5)
10.11 Amended and Restated Trust Agreement among United Bancorp, Inc.
as Depository, Wilmington Trust Company, as Property Trustee,
Wilmington Trust Company, as Delaware Trustee, and
Administrative Trustees, dated as of November 17, 2005.
10.12 Junior Subordinated Indenture between United Bancorp, Inc. and
Wilmington Trust Company, as Trustee, dated as of November 17,
2005.
10.13 Guaranty Agreement between United Bancorp, Inc., as Guarantor,
and Wilmington Trust Company, as Guarantee Trustee, dated as of
November 17, 2005.
13 2005 Annual Report
21 Subsidiaries of the Registrant (5)
23 Consent of Grant Thornton, LLP
31.1 Rule 13a-14(a) Certification - CEO
31.2 Rule 13a-14(a) Certification - CFO
32.1 Section 1350 Certification - CEO
32.2 Section 1350 Certification - CFO
(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.
(3) Incorporated by reference to the registrant's 10-K filed with the
Securities and Exchange Commission on March 27, 2003.
(4) Incorporated by reference to Exhibit A to the registrant's Definitive Proxy
Statement filed with the Securities and Exchange Commission on March 11,
1996.
(5) Incorporated by reference to the registrant's 10-K filed with the
Securities and Exchange Commission on March 29, 2004.