Exhibit 99.1
FOR IMMEDIATE RELEASE: | CONTACT: | Robert K. Chapman |
July 24, 2009 | United Bancorp, Inc. | |
734-214-3801 |
UNITED BANCORP, INC. ANNOUNCES
SECOND QUARTER 2009 RESULTS
TECUMSEH, MI – United Bancorp, Inc. (UBMI) reported that additions to the Company’s provision for loan losses and an FDIC special assessment resulted in a net loss of $762,000, or $.20 per share for the quarter ended June 30, 2009, compared to net income of $1.7 million or $.33 per share for the same quarter of 2008. Net loss for the first six months of 2009 was $5.46 million, or $1.16 per share, compared to net income of $3.58 million, or $.70 per share for the same period of 2008.
Second quarter 2009 results of operations for the Company included record levels of net interest income and noninterest income. Robert K. Chapman, President and Chief Executive Officer of the Company, indicated that the Company’s earnings before taxes and provision for loan losses of $3.9 million for the most recent quarter was up from $3.1 million for the first quarter of 2009, and reached the highest level in several quarters. He commented that this reflects the strength of key components of the Company’s longer-term earnings power.
Chapman noted that net interest income for the second quarter improved by 7.1% over the same quarter of 2008 and 4.1% year to date. Increased residential mortgage volume has resulted in year to date growth in noninterest income of 20.4% compared to the same period of 2008, while noninterest expenses excluding the charge for goodwill impairment, increased costs of FDIC Insurance and expenses related to ORE property, were up 5.3%. Included in expenses for the most recent quarter of 2009 was an FDIC special assessment of $405,400.
Mr. Chapman commented that United continues to be proactive in addressing its credit issues. Additions to the Company’s provision for loan losses of $5.40 million for the quarter reflect continuing economic stresses in the Company’s markets. The current quarter’s provision is up from $1.65 million for the second quarter of 2008, but was improved from the first quarter 2009 level of $6.87 million. He indicated the Company’s nonperforming loans at June 30, 2009 have declined from March 31, 2009, and the coverage ratio of allowance to nonperforming loans improved compared to both the first quarter of 2009 and the second quarter of 2008.
Chapman noted that United continues to grow and to support its communities. Consolidated assets of the Company have increased by $84.2 million in the past twelve months, reaching $883.1 million at June 30, 2009. Total loans reached $677.6 million, and deposits grew to $751.3 million at the end of the most recent quarter. Total deposits increased by $82.2 million in the past year, with $41.7 million of that growth in the first six months of 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.
Page 4
Forward-Looking Statements
This press release contains forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and United Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as "continue", “longer-term”, “proactive” and variations of such words and similar expressions. Management's determination of the provision and allowance for loan losses and the appropriate carrying value of its goodwill and other intangible assets involves judgments that are inherently forward-looking. Our ability to successfully implement new programs and initiatives, increase efficiencies, and improve profitability is not entirely within our control and is not assured. The future effect of changes in the real estate, financial and credit markets and the national and regional economy on the banking industry, generally, and United Bancorp, Inc., specifically, are also inherently uncertain. 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. Risk factors include, but are not limited to, the risk factors described in "Item 1A - Risk Factors" of United Bancorp, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2008. 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.
Page 5
United Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||||||||||
Comparative Consolidated Balance Sheet Data (Unaudited) | ||||||||||||||||||||||||||||
Dollars in thousands | June 30, | Mar 31, | Percent | Dec 31, | Percent | June 30, | Percent | |||||||||||||||||||||
Period-end Balance Sheet | 2009 | 2009 | Change | 2008 | Change | 2008 | Change | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Cash and due from banks | $ | 15,263 | $ | 15,206 | 0.4 | % | $ | 18,472 | -17.4 | % | $ | 16,481 | -7.4 | % | ||||||||||||||
Interest bearing bal. with banks | 25,046 | 52,631 | -52.4 | % | - | 100.0 | % | - | 100.0 | % | ||||||||||||||||||
Federal funds sold | 30,362 | - | 100.0 | % | - | 0.0 | % | 2,050 | 0.0 | % | ||||||||||||||||||
Total cash & cash equivalents | 70,671 | 67,837 | 4.2 | % | 18,472 | 282.6 | % | 18,531 | 281.4 | % | ||||||||||||||||||
Securities available for sale | 97,467 | 93,295 | 4.5 | % | 85,093 | 14.5 | % | 83,204 | 17.1 | % | ||||||||||||||||||
Loans held for sale | 13,800 | 3,693 | 273.7 | % | 4,988 | 176.7 | % | 5,249 | 162.9 | % | ||||||||||||||||||
Portfolio loans | ||||||||||||||||||||||||||||
Personal | 110,796 | 110,193 | 0.5 | % | 112,095 | -1.2 | % | 102,186 | 8.4 | % | ||||||||||||||||||
Business | 470,829 | 482,019 | -2.3 | % | 482,564 | -2.4 | % | 464,658 | 1.3 | % | ||||||||||||||||||
Residential mortgage | 95,946 | 98,143 | -2.2 | % | 102,360 | -6.3 | % | 95,170 | 0.8 | % | ||||||||||||||||||
Total portfolio loans | 677,571 | 690,355 | -1.9 | % | 697,019 | -2.8 | % | 662,014 | 2.3 | % | ||||||||||||||||||
Allowance for loan losses | 21,050 | 20,698 | 1.7 | % | 18,312 | 15.0 | % | 13,008 | 61.8 | % | ||||||||||||||||||
Net loans | 656,521 | 669,657 | -2.0 | % | 678,707 | -3.3 | % | 649,006 | 1.2 | % | ||||||||||||||||||
Premises and equipment, net | 12,649 | 12,926 | -2.1 | % | 13,205 | -4.2 | % | 12,862 | -1.7 | % | ||||||||||||||||||
Goodwill | - | - | 3,469 | -100.0 | % | 3,469 | -100.0 | % | ||||||||||||||||||||
Bank owned life insurance | 12,692 | 12,569 | 1.0 | % | 12,447 | 2.0 | % | 12,194 | 4.1 | % | ||||||||||||||||||
Other assets | 19,330 | 18,361 | 5.3 | % | 16,012 | 20.7 | % | 14,407 | 34.2 | % | ||||||||||||||||||
Total Assets | $ | 883,130 | $ | 878,338 | 0.5 | % | $ | 832,393 | 6.1 | % | $ | 798,922 | 10.5 | % | ||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||
Non-interest bearing | $ | 107,613 | $ | 105,191 | 2.3 | % | $ | 89,487 | 20.3 | % | $ | 89,088 | 20.8 | % | ||||||||||||||
Interest bearing | 643,671 | 636,091 | 1.2 | % | 620,062 | 3.8 | % | 579,966 | 11.0 | % | ||||||||||||||||||
Total deposits | 751,284 | 741,282 | 1.3 | % | 709,549 | 5.9 | % | 669,054 | 12.3 | % | ||||||||||||||||||
Fed funds borrowed | - | - | - | 0.0 | % | - | -100.0 | % | ||||||||||||||||||||
FHLB advances outstanding | 44,126 | 48,126 | -8.3 | % | 50,036 | -11.8 | % | 51,462 | -14.3 | % | ||||||||||||||||||
Other liabilities | 3,433 | 3,676 | -6.6 | % | 3,357 | 2.3 | % | 4,954 | -30.7 | % | ||||||||||||||||||
Total Liabilities | 798,843 | 793,084 | 0.7 | % | 762,942 | 4.7 | % | 725,470 | 10.1 | % | ||||||||||||||||||
Shareholders' Equity | 84,287 | 85,254 | -1.1 | % | 69,451 | 21.4 | % | 73,452 | 14.8 | % | ||||||||||||||||||
Total Liabilities and Equity | $ | 883,130 | $ | 878,338 | 0.5 | % | $ | 832,393 | 6.1 | % | $ | 798,922 | 10.5 | % | ||||||||||||||
Second Quarter | Year to Date | |||||||||||||||||||||||||||
Average Balance Data | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||||||
Total loans | $ | 699,115 | $ | 664,895 | 5.1 | % | $ | 701,749 | $ | 659,923 | 6.3 | % | ||||||||||||||||
Earning assets | 845,415 | 765,808 | 10.4 | % | 846,485 | 765,257 | 10.6 | % | ||||||||||||||||||||
Total assets | 887,913 | 797,715 | 11.3 | % | 874,468 | 797,815 | 9.6 | % | ||||||||||||||||||||
Deposits | 746,346 | 655,132 | 13.9 | % | 739,463 | 666,169 | 11.0 | % | ||||||||||||||||||||
Shareholders' Equity | 85,493 | 72,890 | 17.3 | % | 85,498 | 72,823 | 17.4 | % | ||||||||||||||||||||
Asset Quality | ||||||||||||||||||||||||||||
Net charge offs | $ | 5,048 | $ | 689 | 632.7 | % | $ | 9,533 | $ | 1,611 | 491.7 | % | ||||||||||||||||
Non-accrual loans | 23,889 | 15,716 | 52.0 | % | ||||||||||||||||||||||||
Non-performing loans | 27,547 | 17,528 | 57.2 | % | ||||||||||||||||||||||||
Non-performing assets | 31,213 | 20,263 | 54.0 | % | ||||||||||||||||||||||||
Nonperforming loans/total loans | 4.07 | % | 2.65 | % | 53.6 | % | ||||||||||||||||||||||
Allowance for loan loss/total loans | 3.11 | % | 1.96 | % | 58.1 | % | ||||||||||||||||||||||
Allowance/nonperforming loans | 76.4 | % | 74.2 | % | 3.0 | % |
Page 6
United Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||||||
Comparative Consolidated Income Statement and Performance Data (Unaudited) | ||||||||||||||||||||||||
Dollars in thousands except per share data | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
Consolidated Income Statement | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
Interest Income | ||||||||||||||||||||||||
Interest and fees on loans | $ | 10,191 | $ | 10,567 | -3.6 | % | $ | 20,332 | $ | 21,899 | -7.2 | % | ||||||||||||
Interest on investment securities | 782 | 922 | -15.2 | % | 1,653 | 1,886 | -12.4 | % | ||||||||||||||||
Interest on fed funds sold & bank balances | 34 | 2 | 1600.0 | % | 51 | 122 | -58.2 | % | ||||||||||||||||
Total interest income | 11,007 | 11,491 | -4.2 | % | 22,036 | 23,907 | -7.8 | % | ||||||||||||||||
Interest Expense | ||||||||||||||||||||||||
Interest on deposits | 2,633 | 3,480 | -24.3 | % | 5,571 | 7,887 | -29.4 | % | ||||||||||||||||
Interest on federal funds purchased | - | 69 | -100.0 | % | - | 76 | -100.0 | % | ||||||||||||||||
Interest on FHLB advances | 461 | 555 | -16.9 | % | 990 | 1,079 | -8.2 | % | ||||||||||||||||
Total interest expense | 3,094 | 4,104 | -24.6 | % | 6,561 | 9,042 | -27.4 | % | ||||||||||||||||
Net Interest Income | 7,913 | 7,387 | 7.1 | % | 15,475 | 14,865 | 4.1 | % | ||||||||||||||||
Provision for loan losses | 5,400 | 1,650 | 227.3 | % | 12,270 | 2,310 | 431.2 | % | ||||||||||||||||
Net Interest Income After Provision | 2,513 | 5,737 | -56.2 | % | 3,205 | 12,555 | -74.5 | % | ||||||||||||||||
Noninterest Income | ||||||||||||||||||||||||
Service charges on deposit accounts | 699 | 894 | -21.8 | % | 1,382 | 1,717 | -19.5 | % | ||||||||||||||||
Trust & Investment fee income | 948 | 1,144 | -17.1 | % | 1,944 | 2,313 | -16.0 | % | ||||||||||||||||
Gains (losses) on securities transactions | - | 51 | 100.0 | % | (13 | ) | 104 | -112.5 | % | |||||||||||||||
Income from loan sales and servicing | 2,131 | 808 | 163.7 | % | 3,756 | 1,417 | 165.1 | % | ||||||||||||||||
ATM, debit and credit card fee income | 590 | 591 | -0.2 | % | 1,098 | 1,120 | -2.0 | % | ||||||||||||||||
Income from bank-owned life insurance | 123 | 118 | 4.2 | % | 245 | 233 | 5.2 | % | ||||||||||||||||
Other income | 222 | 160 | 38.8 | % | 384 | 400 | -4.0 | % | ||||||||||||||||
Total noninterest income | 4,713 | 3,766 | 25.1 | % | 8,796 | 7,304 | 20.4 | % | ||||||||||||||||
Noninterest Expense | ||||||||||||||||||||||||
Salaries and employee benefits | 4,761 | 4,063 | 17.2 | % | 9,367 | 8,470 | 10.6 | % | ||||||||||||||||
Occupancy and equipment expense | 1,307 | 1,215 | 7.6 | % | 2,656 | 2,459 | 8.0 | % | ||||||||||||||||
External data processing | 430 | 460 | -6.5 | % | 838 | 876 | -4.3 | % | ||||||||||||||||
Advertising and marketing expenses | 160 | 316 | -49.4 | % | 398 | 691 | -42.4 | % | ||||||||||||||||
Attorney & other professional fees | 220 | 235 | -6.4 | % | 483 | 468 | 3.2 | % | ||||||||||||||||
Director fees | 112 | 107 | 4.7 | % | 224 | 215 | 4.2 | % | ||||||||||||||||
Expenses relating to ORE property | 221 | 28 | 689.3 | % | 631 | 77 | 719.5 | % | ||||||||||||||||
FDIC Insurance premiums | 706 | 72 | 880.6 | % | 1,002 | 144 | 595.8 | % | ||||||||||||||||
Goodwill impairment | - | - | 0.0 | % | 3,469 | - | 100.0 | % | ||||||||||||||||
Other expense | 782 | 752 | 4.0 | % | 1,652 | 1,650 | 0.1 | % | ||||||||||||||||
Total noninterest expense | 8,699 | 7,248 | 20.0 | % | 20,720 | 15,050 | 37.7 | % | ||||||||||||||||
Income (Loss) Before Federal Income Tax | (1,473 | ) | 2,255 | -165.3 | % | (8,719 | ) | 4,809 | -281.3 | % | ||||||||||||||
Federal income tax | (711 | ) | 560 | -227.0 | % | (3,258 | ) | 1,226 | -365.7 | % | ||||||||||||||
Net Income (Loss) | $ | (762 | ) | $ | 1,695 | -145.0 | % | $ | (5,461 | ) | $ | 3,583 | -252.4 | % | ||||||||||
Performance Ratios | ||||||||||||||||||||||||
Return on average assets | -0.34 | % | 0.86 | % | -139.6 | % | -1.26 | % | 0.90 | % | -239.9 | % | ||||||||||||
Return on average equity | -3.54 | % | 9.29 | % | -138.1 | % | -12.88 | % | 9.82 | % | -231.2 | % | ||||||||||||
Pre-tax, pre-provision ROA (1) | 1.77 | % | 1.96 | % | -9.9 | % | 1.62 | % | 1.78 | % | -8.9 | % | ||||||||||||
Net interest margin (FTE) | 3.88 | % | 4.07 | % | -4.6 | % | 3.86 | % | 4.10 | % | -5.8 | % | ||||||||||||
Efficiency ratio | 67.6 | % | 63.6 | % | 6.3 | % | 83.7 | % | 69.3 | % | 20.8 | % | ||||||||||||
Common Stock Performance | ||||||||||||||||||||||||
Basic & diluted earnings (loss) per share | $ | (0.20 | ) | $ | 0.33 | -160.6 | % | $ | (1.16 | ) | $ | 0.70 | -265.7 | % | ||||||||||
Dividends per share | 0.00 | 0.20 | -100.0 | % | 0.02 | 0.40 | -95.0 | % | ||||||||||||||||
Dividend payout ratio | 0.0 | % | 60.6 | % | -100.0 | % | NA | 57.1 | % | NA | ||||||||||||||
Book value per share | $ | 12.68 | $ | 14.54 | -12.7 | % | ||||||||||||||||||
Market value per share (2) | 6.10 | 15.00 | -59.3 | % |
(1) | Excludes first quarter 2009 goodwill impairment charge | ||||||||||||||||||||||||
(2) | Market value per share is based on the last reported transaction on OTCBB before period end. |
Page 7
United Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||
Trends of Selected Consolidated Financial Data (Unaudited) | ||||||||||||||||||||
Dollars in thousands except per share data | 2009 | 2008 | ||||||||||||||||||
Balance Sheet Data | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | |||||||||||||||
Period-end: | ||||||||||||||||||||
Portfolio loans | $ | 677,571 | $ | 690,355 | $ | 697,019 | $ | 683,064 | $ | 662,014 | ||||||||||
Total loans | 691,371 | 694,048 | 702,007 | 690,171 | 667,263 | |||||||||||||||
Allowance for loan losses | 21,050 | 20,698 | 18,312 | 14,335 | 13,008 | |||||||||||||||
Earning assets | 844,246 | 839,974 | 787,100 | 768,184 | 752,517 | |||||||||||||||
Total assets | 883,130 | 878,338 | 832,393 | 815,347 | 798,922 | |||||||||||||||
Deposits | 751,284 | 741,282 | 709,549 | 686,553 | 669,054 | |||||||||||||||
Shareholders' Equity | 84,287 | 85,254 | 69,451 | 72,766 | 73,452 | |||||||||||||||
Average: | ||||||||||||||||||||
Total loans | $ | 699,115 | $ | 704,412 | $ | 697,865 | $ | 673,548 | $ | 664,895 | ||||||||||
Earning assets | 845,415 | 837,712 | 793,937 | 765,119 | 765,808 | |||||||||||||||
Total assets | 887,913 | 866,243 | 836,741 | 801,175 | 797,715 | |||||||||||||||
Deposits | 746,346 | 727,715 | 706,757 | 668,354 | 655,132 | |||||||||||||||
Shareholders' Equity | 85,493 | 86,081 | 72,343 | 72,890 | 72,890 | |||||||||||||||
Income Statement Summary | ||||||||||||||||||||
Net interest income | $ | 7,913 | $ | 7,562 | $ | 7,342 | $ | 7,538 | $ | 7,387 | ||||||||||
Provision for loan losses | 5,400 | 6,870 | 8,997 | 3,300 | 1,650 | |||||||||||||||
Non-interest income | 4,713 | 4,083 | 2,538 | 3,667 | 3,766 | |||||||||||||||
Non-interest expense | 8,699 | 12,021 | 7,291 | 7,623 | 7,248 | |||||||||||||||
Federal income tax | (711 | ) | (2,547 | ) | (2,392 | ) | (114 | ) | 560 | |||||||||||
Net income (loss) | $ | (762 | ) | $ | (4,699 | ) | $ | (4,016 | ) | $ | 396 | $ | 1,696 | |||||||
Basic & diluted earnings (loss) per common share | $ | (0.20 | ) | $ | (0.96 | ) | $ | (0.79 | ) | $ | 0.08 | $ | 0.33 | |||||||
Performance Ratios and Liquidity | ||||||||||||||||||||
Return on average assets | -0.34 | % | -2.20 | % | -1.91 | % | 0.20 | % | 0.86 | % | ||||||||||
Return on average common equity | -3.54 | % | -22.14 | % | -22.08 | % | 2.14 | % | 9.29 | % | ||||||||||
Pre-tax, pre-provision ROA (1) | 1.77 | % | 1.43 | % | 1.24 | % | 1.78 | % | 1.96 | % | ||||||||||
Net interest margin (FTE) | 3.88 | % | 3.84 | % | 3.87 | % | 4.16 | % | 4.07 | % | ||||||||||
Efficiency ratio | 67.6 | % | 101.1 | % | 72.0 | % | 66.5 | % | 63.6 | % | ||||||||||
Ratio of loans to deposits | 90.2 | % | 93.1 | % | 98.2 | % | 99.5 | % | 98.1 | % | ||||||||||
Asset Quality | ||||||||||||||||||||
Net charge offs | $ | 5,048 | $ | 4,484 | $ | 5,020 | $ | 1,973 | $ | 689 | ||||||||||
Non-accrual loans | 23,889 | 25,962 | 20,019 | 13,986 | 15,716 | |||||||||||||||
Non-performing loans | 27,547 | 29,181 | 21,522 | 16,717 | 17,528 | |||||||||||||||
Non-performing assets | 31,213 | 32,582 | 24,981 | 20,270 | 20,263 | |||||||||||||||
Nonperforming loans/total loans | 4.07 | % | 4.23 | % | 3.09 | % | 2.45 | % | 2.65 | % | ||||||||||
Allowance for loan loss/total loans | 3.11 | % | 3.00 | % | 2.63 | % | 2.10 | % | 1.96 | % | ||||||||||
Allowance/nonperforming loans | 76.4 | % | 70.9 | % | 85.1 | % | 85.8 | % | 74.2 | % | ||||||||||
Market Data for Common Stock | ||||||||||||||||||||
Book value per share | $ | 12.68 | $ | 12.88 | $ | 13.75 | $ | 14.40 | $ | 14.54 | ||||||||||
Market value per share (2) | ||||||||||||||||||||
High | 7.00 | 10.50 | 12.99 | 14.98 | 20.00 | |||||||||||||||
Low | 5.60 | 5.50 | 7.55 | 9.20 | 14.00 | |||||||||||||||
Period-end | 6.10 | 6.50 | 7.55 | 10.00 | 15.00 | |||||||||||||||
Period-end shares outstanding | 5,059 | 5,059 | 5,053 | 5,053 | 5,052 | |||||||||||||||
Average shares outstanding | 5,059 | 5,054 | 5,053 | 5,053 | 5,110 | |||||||||||||||
Capital and Stock Performance | ||||||||||||||||||||
Tier 1 Leverage Ratio | 9.4 | % | 9.7 | % | 7.9 | % | 8.7 | % | 8.8 | % | ||||||||||
Total capital to risk-weighted assets | 13.4 | % | 13.3 | % | 10.7 | % | 11.4 | % | 11.6 | % | ||||||||||
Dividends per common share | $ | - | $ | 0.02 | $ | 0.10 | $ | 0.20 | $ | 0.20 | ||||||||||
Dividend payout ratio | 0.0 | % | NA | NA | 256.4 | % | 60.6 | % | ||||||||||||
Price/earnings ratio (TTM) | NA | NA | NA | 15.8 | x | 14.9 | x | |||||||||||||
Period-end common stock market price/book value | 48.1 | % | 50.5 | % | 54.9 | % | 69.4 | % | 103.2 | % | ||||||||||
(1) | Excludes first quarter 2009 goodwill impairment charge | |||||||||||||||||||
(2) | Market value per share is based on the last reported transaction on OTCBB before period end. |
Page 8