Exhibit 99.1
FOR IMMEDIATE RELEASE: | CONTACT: | Robert K. Chapman |
February 27, 2009 | United Bancorp, Inc. | |
734-214-3801 |
UNITED BANCORP, INC.
ANNOUNCES REVISION OF FOURTH QUARTER
AND FULL YEAR 2008 EARNINGS
TECUMSEH, MI – United Bancorp, Inc. (OTCBB: UBMI) today announced an adjustment to its earnings for the fourth quarter of 2008 and full year ended December 31, 2008. The adjustment relates to the Company's recognition of the impairment of loans to one borrower and the Company's corresponding increase in the amount of its Allowance for Loan Losses (ALL) at December 31, 2008 to take into account the impairment of the loans. United previously issued a press release on January 30, 2009 in which it announced its earnings for these periods.
During the ongoing finalization of its financial statements and preparation of its Annual Report on Form10-K for the year ended December 31, 2008, and subsequent to the January 30, 2009 earnings press release, the Company considered new information concerning loans to one commercial loan customer and, as a result, has determined these loans to be impaired as of December 31, 2008. As a consequence, management determined that an additional provision of $1.832 million to the Company’s ALL in the fourth quarter of 2008 was warranted.
This change affects the Company’s unaudited financial statements for the three month and one year periods ended December 31, 2008. Net loss for the fourth quarter was increased by $1.209 million, or a $0.24 increase to the previously-reported basic and diluted loss per share. As a result of this adjustment, the Company’s revised net loss was $4.016 million for the fourth quarter of 2008 and $36,000 for the year ended December 31, 2008. For the fourth quarter of 2008, basic and diluted loss per share was $0.79, while for the full year ended December 31, 2008, basic and diluted loss per share was $0.01.
These changes will be reflected in United Bancorp, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008, which will be filed on or before March 16, 2009. We have set forth below the Company’s unaudited consolidated financial highlights, unaudited consolidated balance sheets and unaudited consolidated statements of income for the fourth quarter of 2008 and full year ended December 31, 2008. This unaudited financial information replaces the unaudited consolidated financial highlights, unaudited consolidated balance sheets and unaudited consolidated statements of income contained in United Bancorp, Inc.'s previous earnings press release of January 30, 2009.
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.
Forward-Looking Statements
This press release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and United Bancorp, Inc. Management's determination of the provision and allowance for loan losses involves judgments that are inherently forward-looking. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. United Bancorp, Inc. undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
Unaudited Consolidated Financial Statements Follow.
United Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||||||
Comparative Consolidated Balance Sheet Data (Unaudited) | ||||||||||||||||||||||||
Dollars in thousands except per share data | ||||||||||||||||||||||||
Dec. 31 | Sep. 30 | Percent | Dec. 31 | Percent | ||||||||||||||||||||
Period-end Balance Sheet | 2008 | 2008 | Change | 2007 | Change | |||||||||||||||||||
Assets | ||||||||||||||||||||||||
Cash and due from banks | $ | 18,472 | $ | 16,856 | 9.6 | % | $ | 17,996 | 2.6 | % | ||||||||||||||
Federal funds sold | - | - | 100.0 | % | 11,130 | -100.0 | % | |||||||||||||||||
Total cash and cash equivalents | 18,472 | 16,856 | 9.6 | % | 29,126 | -36.6 | % | |||||||||||||||||
Securities available for sale | 85,093 | 78,013 | 9.1 | % | 85,898 | -0.9 | % | |||||||||||||||||
Loans held for sale | 4,988 | 7,107 | -29.8 | % | 5,770 | -13.6 | % | |||||||||||||||||
Portfolio loans | ||||||||||||||||||||||||
Personal | 112,095 | 110,136 | 1.8 | % | 98,659 | 13.6 | % | |||||||||||||||||
Business | 482,564 | 475,648 | 1.5 | % | 451,717 | 6.8 | % | |||||||||||||||||
Residential mortgage | 102,360 | 97,280 | 5.2 | % | 94,154 | 8.7 | % | |||||||||||||||||
Total loans | 697,019 | 683,064 | 2.0 | % | 644,530 | 8.1 | % | |||||||||||||||||
Allowance for loan losses | 18,312 | 14,335 | 27.7 | % | 12,306 | 48.8 | % | |||||||||||||||||
Net loans | 678,707 | 668,729 | 1.5 | % | 632,224 | 7.4 | % | |||||||||||||||||
Premises and equipment, net | 13,205 | 12,621 | 4.6 | % | 13,160 | 0.3 | % | |||||||||||||||||
Goodwill | 3,469 | 3,469 | 0.0 | % | 3,469 | 0.0 | % | |||||||||||||||||
Bank owned life insurance | 12,447 | 12,319 | 1.0 | % | 11,961 | 4.1 | % | |||||||||||||||||
Other assets | 16,012 | 16,233 | -1.4 | % | 14,079 | 13.7 | % | |||||||||||||||||
Total Assets | $ | 832,393 | $ | 815,347 | 2.1 | % | $ | 795,687 | 4.6 | % | ||||||||||||||
Liabilities | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Non-interest bearing | $ | 89,487 | $ | 88,212 | 1.4 | % | $ | 77,878 | 14.9 | % | ||||||||||||||
Interest bearing | 620,062 | 598,341 | 3.6 | % | 593,659 | 4.4 | % | |||||||||||||||||
Total deposits | 709,549 | 686,553 | 3.3 | % | 671,537 | 5.7 | % | |||||||||||||||||
Fed funds borrowed | - | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||
FHLB advances outstanding | 50,036 | 51,951 | -3.7 | % | 44,611 | 12.2 | % | |||||||||||||||||
Other liabilities | 3,357 | 4,077 | -17.7 | % | 6,572 | -48.9 | % | |||||||||||||||||
Total Liabilities | 762,942 | 742,581 | 2.7 | % | 722,720 | 5.6 | % | |||||||||||||||||
Shareholders' Equity | 69,451 | 72,766 | -4.6 | % | 72,967 | -4.8 | % | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 832,393 | $ | 815,347 | 2.1 | % | $ | 795,687 | 4.6 | % | ||||||||||||||
Fourth Quarter | Year to Date | |||||||||||||||||||||||
Average Balance Data | 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||||||
Total loans | $ | 697,865 | $ | 650,606 | 7.3 | % | $ | 672,885 | $ | 633,855 | 6.2 | % | ||||||||||||
Earning assets | 793,937 | 758,261 | 4.7 | % | 773,545 | 741,133 | 4.4 | % | ||||||||||||||||
Total assets | 836,741 | 797,472 | 4.9 | % | 809,300 | 777,243 | 4.1 | % | ||||||||||||||||
Deposits | 706,757 | 665,498 | 6.2 | % | 676,845 | 647,342 | 4.6 | % | ||||||||||||||||
Shareholders' Equity | 72,343 | 75,029 | -3.6 | % | 73,585 | 75,042 | -1.9 | % | ||||||||||||||||
Asset Quality | ||||||||||||||||||||||||
Net charge offs | $ | 5,020 | $ | 1,211 | 314.5 | % | $ | 8,601 | $ | 4,182 | 105.7 | % | ||||||||||||
Non-accrual loans | 20,019 | 13,695 | 46.2 | % | ||||||||||||||||||||
Non-performing loans | 21,522 | 15,150 | 42.1 | % | ||||||||||||||||||||
Non-performing assets | 24,981 | 17,415 | 43.4 | % | ||||||||||||||||||||
Nonperforming loans/total loans | 3.09 | % | 2.35 | % | 31.4 | % | ||||||||||||||||||
Allowance for loan loss/total loans | 2.63 | % | 1.91 | % | 37.6 | % | ||||||||||||||||||
Allowance/nonperforming loans | 85.1 | % | 81.2 | % | 4.7 | % |
United Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||||||
Comparative Consolidated Income Statement and Performance Data (Unaudited) | ||||||||||||||||||||||||
Dollars in thousands except per share data | ||||||||||||||||||||||||
Three months ended Dec. 31 | Twelve months ended Dec. 31 | |||||||||||||||||||||||
Consolidated Income Statement | 2008 | 2007 | % Change | 2008 | 2007 | % Change | ||||||||||||||||||
Interest Income | ||||||||||||||||||||||||
Interest and fees on loans | $ | 10,643 | $ | 11,982 | -11.2 | % | $ | 43,288 | $ | 47,301 | -8.5 | % | ||||||||||||
Interest on investment securities | 870 | 980 | -11.2 | % | 3,625 | 4,062 | -10.8 | % | ||||||||||||||||
Interest on federal funds sold | 3 | 116 | -97.4 | % | 128 | 271 | -52.8 | % | ||||||||||||||||
Total interest income | 11,516 | 13,078 | -11.9 | % | 47,041 | 51,634 | -8.9 | % | ||||||||||||||||
Interest Expense | ||||||||||||||||||||||||
Interest on deposits | 3,597 | 5,117 | -29.7 | % | 14,964 | 19,631 | -23.8 | % | ||||||||||||||||
Interest on federal funds purchased | 1 | 15 | -93.3 | % | 96 | 175 | -45.1 | % | ||||||||||||||||
Interest on FHLB advances | 576 | 535 | 7.7 | % | 2,237 | 2,067 | 8.2 | % | ||||||||||||||||
Total interest expense | 4,174 | 5,667 | -26.3 | % | 17,297 | 21,873 | -20.9 | % | ||||||||||||||||
Net Interest Income | 7,342 | 7,411 | -0.9 | % | 29,744 | 29,761 | -0.1 | % | ||||||||||||||||
Provision for loan losses | 8,997 | 5,801 | 55.1 | % | 14,607 | 8,637 | 69.1 | % | ||||||||||||||||
Net Interest Income After | ||||||||||||||||||||||||
Provision for Loan Losses | (1,655 | ) | 1,610 | -202.8 | % | 15,137 | 21,124 | -28.3 | % | |||||||||||||||
Noninterest Income | ||||||||||||||||||||||||
Service charges on deposit accounts | 781 | 957 | -18.4 | % | 3,381 | 3,579 | -5.5 | % | ||||||||||||||||
Trust & Investment fee income | 956 | 1,231 | -22.3 | % | 4,343 | 4,801 | -9.5 | % | ||||||||||||||||
Gains on securities transactions | (124 | ) | 8 | -1650.0 | % | (18 | ) | 9 | -300.0 | % | ||||||||||||||
Income from loan sales and servicing | 47 | 507 | -90.7 | % | 2,187 | 1,749 | 25.0 | % | ||||||||||||||||
ATM, debit and credit card fee income | 558 | 569 | -1.9 | % | 2,257 | 2,118 | 6.6 | % | ||||||||||||||||
Income from bank-owned life insurance | 127 | 120 | 5.8 | % | 486 | 461 | 5.4 | % | ||||||||||||||||
Other income | 193 | 175 | 10.3 | % | 874 | 935 | -6.5 | % | ||||||||||||||||
Total noninterest income | 2,538 | 3,567 | -28.8 | % | 13,510 | 13,652 | -1.0 | % | ||||||||||||||||
Noninterest Expense | ||||||||||||||||||||||||
Salaries and employee benefits | 3,901 | 3,532 | 10.4 | % | 16,333 | 14,862 | 9.9 | % | ||||||||||||||||
Occupancy and equipment expense | 1,158 | 1,079 | 7.3 | % | 4,874 | 4,724 | 3.2 | % | ||||||||||||||||
External data processing | 444 | 452 | -1.8 | % | 1,755 | 1,605 | 9.3 | % | ||||||||||||||||
Advertising and marketing | 219 | 251 | -12.7 | % | 1,191 | 1,193 | -0.2 | % | ||||||||||||||||
Other expense | 1,569 | 1,299 | 20.8 | % | 5,810 | 5,175 | 12.3 | % | ||||||||||||||||
Total noninterest expense | 7,291 | 6,613 | 10.3 | % | 29,963 | 27,559 | 8.7 | % | ||||||||||||||||
Income (Loss) Before Federal Income Tax | (6,408 | ) | (1,436 | ) | 346.2 | % | (1,316 | ) | 7,217 | -118.2 | % | |||||||||||||
Federal income tax | (2,392 | ) | (686 | ) | 248.7 | % | (1,280 | ) | 1,635 | -178.3 | % | |||||||||||||
Net Income (Loss) | $ | (4,016 | ) | $ | (750 | ) | 435.5 | % | $ | (36 | ) | $ | 5,582 | -100.6 | % | |||||||||
Performance Ratios | ||||||||||||||||||||||||
Return on average assets | -1.91 | % | -0.37 | % | 416.0 | % | 0.00 | % | 0.72 | % | -100.6 | % | ||||||||||||
Return on average equity | -22.08 | % | -3.97 | % | 456.2 | % | -0.05 | % | 7.44 | % | -100.7 | % | ||||||||||||
Net interest margin (FTE) | 3.87 | % | 4.06 | % | -4.7 | % | 4.04 | % | 4.18 | % | -3.4 | % | ||||||||||||
Efficiency ratio | 72.0 | % | 59.0 | % | 22.0 | % | 67.7 | % | 62.1 | % | 9.0 | % | ||||||||||||
Stock Performance (1) | ||||||||||||||||||||||||
Basic and diluted earnings per share | $ | (0.79 | ) | $ | (0.15 | ) | 444.8 | % | $ | (0.01 | ) | $ | 1.06 | -100.9 | % | |||||||||
Dividends per share | 0.10 | 0.20 | -50.0 | % | 0.70 | 0.79 | -11.4 | % | ||||||||||||||||
Dividend payout ratio | -12.7 | % | -137.9 | % | -90.8 | % | NA | 74.5 | % | NA | ||||||||||||||
Book value per share | $ | 13.75 | $ | 14.33 | -4.1 | % | ||||||||||||||||||
Market value per share (2) | 7.55 | 17.00 | -55.6 | % | ||||||||||||||||||||
Period-end shares outstanding | 5,053 | 5,092 | -0.8 | % | ||||||||||||||||||||
Average shares outstanding | 5,053 | 5,108 | -1.1 | % | 5,062 | 5,191 | -2.5 | % | ||||||||||||||||
(1) Per-share data is restated to reflect 100% stock dividend in 2007 | ||||||||||||||||||||||||
(2) Market value per share is based on the last reported transaction on OTCBB before period end. |
United Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||
Trends of Selected Consolidated Financial Data (Unaudited) | ||||||||||||||||||||
Dollars in thousands except per share data | ||||||||||||||||||||
2008 | 2007 | |||||||||||||||||||
Balance Sheet Data | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
Period-end: | ||||||||||||||||||||
Total loans | $ | 697,019 | $ | 683,064 | $ | 662,014 | $ | 654,965 | $ | 644,530 | ||||||||||
Allowance for loan losses | 18,312 | 14,335 | 13,008 | 12,047 | 12,306 | |||||||||||||||
Earning assets | 787,100 | 768,184 | 752,517 | 751,774 | 747,328 | |||||||||||||||
Total assets | 832,393 | 815,347 | 798,922 | 797,874 | 795,687 | |||||||||||||||
Deposits | 709,549 | 686,553 | 669,054 | 667,522 | 671,537 | |||||||||||||||
Shareholders' Equity | 69,451 | 72,766 | 73,452 | 74,093 | 72,967 | |||||||||||||||
Average: | ||||||||||||||||||||
Total loans | $ | 697,865 | $ | 673,548 | $ | 664,895 | $ | 654,940 | $ | 650,606 | ||||||||||
Earning assets | 793,937 | 765,119 | 765,808 | 768,288 | 758,261 | |||||||||||||||
Total assets | 836,741 | 801,175 | 797,715 | 801,301 | 797,472 | |||||||||||||||
Deposits | 706,757 | 668,354 | 655,132 | 677,023 | 665,498 | |||||||||||||||
Shareholders' Equity | 72,343 | 72,890 | 72,890 | 72,757 | 75,029 | |||||||||||||||
Income Statement Summary | ||||||||||||||||||||
Net interest income | $ | 7,342 | $ | 7,538 | $ | 7,387 | $ | 7,478 | $ | 7,411 | ||||||||||
Provision for loan losses | 8,997 | 3,300 | 1,650 | 660 | 5,801 | |||||||||||||||
Non-interest income | 2,538 | 3,667 | 3,766 | 3,538 | 3,567 | |||||||||||||||
Non-interest expense | 7,291 | 7,623 | 7,248 | 7,802 | 6,613 | |||||||||||||||
Federal income tax | (2,392 | ) | (114 | ) | 560 | 665 | (686 | ) | ||||||||||||
Net income (loss) | $ | (4,016 | ) | $ | 396 | $ | 1,696 | $ | 1,888 | $ | (750 | ) | ||||||||
Basic & diluted earnings (loss) per share | $ | (0.79 | ) | $ | 0.08 | $ | 0.33 | $ | 0.37 | $ | (0.15 | ) | ||||||||
Performance Ratios and Liquidity | ||||||||||||||||||||
Return on average assets | -1.91 | % | 0.20 | % | 0.86 | % | 0.94 | % | -0.37 | % | ||||||||||
Return on average equity | -22.08 | % | 2.14 | % | 9.29 | % | 10.35 | % | -3.97 | % | ||||||||||
Net interest margin (FTE) | 3.87 | % | 4.16 | % | 4.07 | % | 4.10 | % | 4.06 | % | ||||||||||
Efficiency ratio | 72.0 | % | 66.5 | % | 63.6 | % | 69.3 | % | 59.0 | % | ||||||||||
Ratio of loans to deposits | 98.2 | % | 99.5 | % | 98.9 | % | 98.1 | % | 96.0 | % | ||||||||||
Asset Quality | ||||||||||||||||||||
Net charge offs | $ | 5,020 | $ | 1,973 | $ | 689 | $ | 919 | $ | 1,211 | ||||||||||
Non-accrual loans | 20,019 | 13,986 | 15,716 | 13,253 | 13,695 | |||||||||||||||
Non-performing loans | 21,522 | 16,717 | 17,528 | 16,235 | 15,150 | |||||||||||||||
Non-performing assets | 24,981 | 20,270 | 20,263 | 18,626 | 17,415 | |||||||||||||||
Nonperforming loans/total loans | 3.09 | % | 2.45 | % | 2.65 | % | 2.48 | % | 2.35 | % | ||||||||||
Allowance for loan loss/total loans | 2.63 | % | 2.10 | % | 1.96 | % | 1.84 | % | 1.91 | % | ||||||||||
Allowance/nonperforming loans | 85.1 | % | 85.8 | % | 74.2 | % | 74.2 | % | 81.2 | % | ||||||||||
Market Data | ||||||||||||||||||||
Book value per share | $ | 13.75 | $ | 14.40 | $ | 14.54 | $ | 14.56 | $ | 14.33 | ||||||||||
Market value per share | ||||||||||||||||||||
High | 12.99 | 14.98 | 20.00 | 22.00 | 22.00 | |||||||||||||||
Low | 7.55 | 9.20 | 14.00 | 17.55 | 17.00 | |||||||||||||||
Period-end | 7.55 | 10.00 | 15.00 | 18.00 | 17.00 | |||||||||||||||
Period-end shares outstanding | 5,053 | 5,052 | 5,052 | 5,085 | 5,092 | |||||||||||||||
Average shares outstanding | 5,053 | 5,053 | 5,110 | 5,145 | 5,108 | |||||||||||||||
Capital and Stock Performance | ||||||||||||||||||||
Tier 1 Leverage Ratio | 7.9 | % | 8.7 | % | 8.8 | % | 8.8 | % | 8.7 | % | ||||||||||
Total capital to risk-weighted assets | 10.7 | % | 11.4 | % | 11.6 | % | 11.7 | % | 11.8 | % | ||||||||||
Dividends per share | $ | 0.10 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | ||||||||||
Dividend payout ratio | -12.7 | % | 250.0 | % | 60.6 | % | 54.1 | % | -137.9 | % | ||||||||||
Price/earnings ratio (TTM) | NA | 15.7 | x | 14.9 | x | 16.3 | x | 16.1 | x | |||||||||||
Period-end market price/book value | 54.9 | % | 69.4 | % | 103.2 | % | 123.6 | % | 118.6 | % |