| FOR IMMEDIATE RELEASE: | CONTACT: | Robert K. Chapman, |
| July 27, 2012 | President and Chief Executive Officer | |
| United Bancorp, Inc. | ||
| 734-214-3801 |
UNITED BANCORP, INC. ANNOUNCES UNAUDITED
SECOND QUARTER AND YEAR TO DATE 2012 RESULTS
Company reports profitable quarter and first six months
Year to date combined net interest income and noninterest income grows 8.3%
Asset quality trends continue to improve
ANN ARBOR, MI - United Bancorp, Inc. (UBMI) reported consolidated net income of $785,000, or $0.04 per share of common stock, for the second quarter of 2012, compared to consolidated net income of $361,000, or $0.01 per share of common stock, for the second quarter of 2011. Consolidated net income for the first six months of 2012 was $1.6 million, or $0.08 per share of common stock, compared to consolidated net income of $720,000, or $0.01 per share of common stock, for the first six months of 2011.
Robert K. Chapman, President and Chief Executive Officer of United Bancorp, Inc. ("United" or the "Company"), commented, "We are pleased to report another profitable quarter, and are cautiously optimistic that we are returning to sustained profitability as a result of our strong core earnings and a continued reduction in loan losses."
Mr. Chapman noted that United's double-digit increases in noninterest income continue to be a significant driver of the Company's improved earnings. Total noninterest income for the quarter and six month periods ended June 30, 2012 was up 20.1% and 20.6%, respectively, compared to the same periods of 2011. He indicated that noninterest income represented 41.1% and 39.9%, respectively, of the Company's combined net interest income and noninterest income for the three and six months ended June 30, 2012, compared to 36.9% and 35.8%, respectively, for the same periods of 2011.
This growth was driven, in part, by increased loan originations, both of residential mortgages and commercial loans. The opening of the Company's loan production office in Brighton, Michigan in December 2011 has contributed to this increase in lending activity, and in the second quarter of 2012, the Company received approval from its regulators to convert its loan production office in Brighton to a full-service banking office. United continues to pursue lending opportunities in existing and adjacent markets, and opened a loan production office within the City of Monroe, Michigan in July 2012.
Improved asset quality trends have allowed United to reduce its levels of provision for loan losses during 2012. The Company's provision for loan losses for the second quarter and first six months of 2012 was $2.55 million and $4.65 million, respectively, down from $3.1 million and $5.9 million, respectively, for the same periods of 2011, and exceeded net charge-offs for all four periods. Net charge-offs for the second quarter of 2012 were at the lowest quarterly level since the second quarter of 2008, and net charge-offs for the six months ended June 30, 2012 were down 44% from the same period of 2011.
The Company's ratio of allowance for loan losses to total loans was 3.83% and the ratio of allowance for loan losses to nonperforming loans was 85.4% at June 30, 2012, compared to 3.66% and 80.0%, respectively, at December 31, 2011 and 4.41% and 81.2%, respectively, at June 30, 2011. The Company's allowance for loan losses increased by $1.5 million from December 31, 2011 to June 30, 2012, but decreased by $3.3 million from June 30, 2011 to June 30, 2012.
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On June 19, 2012, the United States Department of the Treasury sold all 20,600 shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A, Liquidation Preference Amount $1,000 per share in a modified dutch auction. The Company did not receive any proceeds from the sale of the preferred shares. The sale of the preferred shares did not result in any accounting entries on the books of the Company and did not change the Company's capital position. The Company incurred $299,000 of legal and accounting costs related to the sale of the Preferred Shares in the second quarter of 2012.The Company issued the preferred shares to Treasury on January 16, 2009 as part of Treasury's Troubled Asset Relief Program Capital Purchase Program in a private placement exempt from the registration requirements of federal and state securities laws. On July 18, 2012, the Company repurchased from Treasury for $38,000 a Warrant to purchase 311,492 shares of Company common stock. The Warrant was issued to Treasury in connection with the Company's participation in the TARP Capital Purchase Program.
Mr. Chapman noted that as a result of these transactions, the Company no longer has any obligation to Treasury in connection with the TARP Capital Purchase Program and the Company is no longer subject to certain requirements of the Emergency Economic Stabilization Act of 2008, as amended by the American Recovery and Reinvestment Act of 2009, leaving the Company with greater flexibility to manage its business and affairs and eliminating the management time and expenses which were required to comply with these provisions.
Results of Operations
The Company's consolidated net income was $785,000 in the second quarter of 2012 and $1.6 million for the six months ended June 30, 2012, compared to $361,000 and $720,000, respectively, for the same periods of 2011. Net income per common share for the three and six months ended June 30, 2012 was $0.04 and $0.08, respectively, up from $0.01 per common share for both comparable periods of 2011. Return on average assets was 0.36% and 0.37%, respectively, for the second quarter and first six months of 2012, compared to 0.17% for both of the comparable periods of 2011. Return on average shareholders' equity was 3.35% and 3.48%, respectively, for the second quarter and first six months of 2012, compared to 1.55% and 1.56%, respectively, for the same periods of 2011.
The Company's combined net interest income and noninterest income was up 7.8% in the second quarter and 8.3% in the first six months of 2012 compared to the same periods of 2011. While some categories of noninterest income decreased in the second quarter and first half of 2012 compared to the same periods of 2011, large increases in income from loan sales and servicing offset the decreases. Total noninterest income for the quarter and six month periods ended June 30, 2012 was up 20.1% and 20.6%, respectively, compared to the same periods of 2011.
The Company's noninterest expenses for the three and six month periods ended June 30, 2012 were up 7.6% and 9.6%, respectively, from the comparable periods of 2011. The largest dollar increases were in compensation expense, attorney, accounting and other professional fees, and expenses related to other real estate owned and other foreclosed properties.
Expenses related to salaries and employee benefits increased by 9.5% and 9.4%, respectively, in the second quarter and first six months of 2012 compared to the same periods of 2011. The increase reflects, in part, continued higher levels of commissions and other compensation costs related to the generation of income from loan sales and servicing. In addition, the Company has increased its staffing levels modestly to accommodate its anticipated future expansion, including expansion into Livingston County, and salary increases were reinstated effective April 1, 2011. However, the Company did not pay or accrue any cash bonus or other payout to executive officers or non-commissioned employees under its bonus plans in 2011 or the first six months of 2012.
The Company's provision for loan losses for the second quarter and first six months of 2012 was $2.55 million and $4.65 million, respectively, down from $3.1 million and $5.9 million for the same periods of 2011, and exceeded net charge-offs for all four periods.
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Balance Sheet
Total consolidated assets of the Company were $884.2 million at June 30, 2012, compared to $885.0 million at December 31, 2011 and $862.1 million at June 30, 2011. Total portfolio loans of $577.3 million increased by $13.6 million in the first six months of 2012, and by $2.0 million since June 30, 2011. The Company generally sells its fixed rate long-term residential mortgages on the secondary market, and retains adjustable rate mortgages in its loan portfolio.
While the Company's total portfolio loans have increased by $2.0 million, or 0.3%, since June 30, 2011, the balance of loans serviced for others has increased by $87.7 million, or 12.4%, during the same time period. The Company continues to hold elevated levels of investments, federal funds sold and cash equivalents in order to protect the balance sheet during this prolonged period of economic uncertainty. United's balances in federal funds sold and other short-term investments were $57.6 million at June 30, 2012, compared to $91.8 million at December 31, 2011 and $95.7 million at June 30, 2011. Securities available for sale of $191.9 million at June 30, 2012 were up $18.7 million from December 31, 2011 levels and have increased by $43.9 million since June 30, 2011.
Total deposits of $761.4 million at June 30, 2012 were down $3.5 million from $764.9 million at December 31, 2011, with all of the decrease in interest bearing deposit balances. The majority of the Bank's deposits are derived from core client sources, relating to long-term relationships with local individual, business and public clients. Public clients include local government and municipal bodies, hospitals, universities and other educational institutions. As a result of its strong core funding, the Company's cost of interest-bearing deposits was 0.65% and 0.66% for the second quarter and first six months of 2012, respectively, down from 0.87% and 0.89% for the same periods of 2011.
Asset Quality
The Company's ratio of allowance for loan losses to total loans was 3.83% and the ratio of allowance for loan losses to nonperforming loans was 85.4% at June 30, 2012, compared to 3.66% and 80.0%, respectively, at December 31, 2011 and 4.41% and 81.2%, respectively, at June 30, 2011. The Company's allowance for loan losses increased by $1.5 million from December 31, 2011 to June 30, 2012, but declined by $3.3 million from June 30, 2011 to June 30, 2012. Net charge-offs of $1.5 million for the second quarter of 2012 were at the lowest quarterly level since the second quarter of 2008.
Within the Company's loan portfolio, $25.9 million of loans were considered nonperforming at June 30, 2012, compared to $25.8 million at December 31, 2011 and $31.2 million at June 30, 2011. Total nonperforming loans as a percent of total portfolio loans decreased from 4.57% at the end of 2011 and 5.43% at June 30, 2011 to 4.48% at June 30, 2012. For purposes of this presentation, nonperforming loans consist of nonaccrual loans and accruing loans that are past due 90 days or more, and exclude accruing restructured loans. Balances of accruing restructured loans at June 30, 2012, December 31, 2011 and June 30, 2011 were $18.9 million, $21.8 million and $18.9 million, respectively.
Capital Management
In December, 2010, the Company closed its public offering of 7,583,800 shares of common stock. The net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, were approximately $17.1 million. The Company has contributed $12.0 million of the net proceeds of the offering to the capital of the Bank to increase the Bank's capital and regulatory capital ratios. As a result of the additional capital, the Bank was in compliance with the capital requirements of its MOU with the FDIC and OFIR at December 31, 2010 and 2011, and June 30, 2012. At June 30, 2012, the Bank's Tier 1 capital ratio was 9.35%, and its ratio of total capital to risk-weighted assets was 15.50%. At June 30, 2012, the Bank was categorized as well-capitalized under applicable regulatory guidelines.
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About United Bancorp, Inc.
United Bancorp, Inc. is a community-based financial services company located in Washtenaw, Lenawee, Livingston and Monroe Counties in Michigan. United Bank & Trust is the Company's only subsidiary, and the Bank provides financial solutions to its clients based on their unique circumstances and needs, through a line of business delivery system that includes banking, mortgage, structured finance and wealth management. 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. Forward-looking statements are identifiable by words or phrases such as "trends," "continue," "cautiously optimistic," "returning," "uncertainty," "opportunities" and variations of such words and similar expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to asset and credit quality trends, future levels of profitability, future levels of other real estate owned and other foreclosed properties and related expenses, loan demand, and future expansion of the Company, including the benefits to the Company of expansion into new markets. All statements referencing future time periods are forward-looking.
Management's determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including mortgage servicing rights and deferred tax assets) and other real estate owned and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment) involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated or that other real estate owned can be sold at its carrying value or at all. Our ability to fully comply with all of the provisions of our memorandum of understanding, successfully implement new programs and initiatives, increase efficiencies, utilize our deferred tax asset, address regulatory issues, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and on United Bancorp, Inc., specifically, are also inherently uncertain. Forward-looking 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, clarify or revise forward-looking statements to reflect developments that occur or information obtained after the date of this report.
Risk factors include, but are not limited to, the risk factors described in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2011. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
Non-GAAP Financial Information
This press release includes disclosures about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets. These disclosures are non-GAAP financial measures. For additional information about our pre-tax, pre-provision income and pre-tax, pre-provision return on average assets, please see the unaudited consolidated financial statements and related footnotes that follow.
Unaudited Consolidated Financial Statements Follow.
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| United Bancorp, Inc. and Subsidiary | ||||||||||||||||||||||||||||
| Comparative Consolidated Balance Sheet Data (Unaudited) | ||||||||||||||||||||||||||||
| Dollars in thousands | June 30, | Mar. 31, | Dec. 31, | June 30, | ||||||||||||||||||||||||
| Period-end Balance Sheet | 2012 | 2012 | Change | 2011 | Change | 2011 | Change | |||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||
| Cash and due from banks | $ | 16,225 | $ | 15,109 | $ | 1,116 | $ | 15,798 | $ | 427 | $ | 13,600 | $ | 2,625 | ||||||||||||||
| Interest bearing bal. with banks | 57,591 | 96,386 | (38,795 | ) | 91,428 | (33,837 | ) | 95,708 | (38,117 | ) | ||||||||||||||||||
| Federal funds sold | - | - | - | 366 | (366 | ) | - | - | ||||||||||||||||||||
| Total cash & cash equivalents | 73,816 | 111,495 | (37,679 | ) | 107,592 | (33,776 | ) | 109,308 | (35,492 | ) | ||||||||||||||||||
| Securities available for sale | 191,886 | 183,416 | 8,470 | 173,197 | 18,689 | 148,008 | 43,878 | |||||||||||||||||||||
| FHLB Stock | 2,571 | 2,571 | - | 2,571 | - | 2,571 | - | |||||||||||||||||||||
| Loans held for sale | 10,349 | 11,719 | (1,370 | ) | 8,290 | 2,059 | 2,544 | 7,805 | ||||||||||||||||||||
| Portfolio loans | ||||||||||||||||||||||||||||
| Personal | 108,556 | 103,395 | 5,161 | 103,405 | 5,151 | 107,642 | 914 | |||||||||||||||||||||
Business (1) | 346,135 | 347,765 | (1,630 | ) | 337,178 | 8,957 | 342,411 | 3,724 | ||||||||||||||||||||
| Residential mortgage | 83,444 | 82,759 | 685 | 83,072 | 372 | 83,632 | (188 | ) | ||||||||||||||||||||
| Construction & development | 38,656 | 41,220 | (2,564 | ) | 39,721 | (1,065 | ) | 41,261 | (2,605 | ) | ||||||||||||||||||
| Deferred fees and costs | 488 | 369 | 119 | 326 | 162 | 350 | 138 | |||||||||||||||||||||
| Total portfolio loans | 577,279 | 575,508 | 1,771 | 563,702 | 13,577 | 575,296 | 1,983 | |||||||||||||||||||||
| Allowance for loan losses | 22,097 | 21,048 | 1,049 | 20,633 | 1,464 | 25,370 | (3,273 | ) | ||||||||||||||||||||
| Net loans | 555,182 | 554,460 | 722 | 543,069 | 12,113 | 549,926 | 5,256 | |||||||||||||||||||||
| Premises and equipment, net | 10,793 | 10,756 | 37 | 10,795 | (2 | ) | 10,850 | (57 | ) | |||||||||||||||||||
| Bank owned life insurance | 14,028 | 13,923 | 105 | 13,819 | 209 | 13,603 | 425 | |||||||||||||||||||||
| Other assets | 25,527 | 26,110 | (583 | ) | 25,676 | (149 | ) | 25,289 | 238 | |||||||||||||||||||
| Total Assets | $ | 884,152 | $ | 914,450 | $ | (30,298 | ) | $ | 885,009 | $ | (857 | ) | $ | 862,099 | $ | 22,053 | ||||||||||||
| Liabilities | ||||||||||||||||||||||||||||
| Deposits | ||||||||||||||||||||||||||||
| Non-interest bearing | $ | 161,307 | $ | 160,527 | $ | 780 | $ | 139,346 | $ | 21,961 | $ | 139,314 | $ | 21,993 | ||||||||||||||
| Interest bearing | 600,081 | 631,970 | (31,889 | ) | 625,510 | (25,429 | ) | 598,214 | 1,867 | |||||||||||||||||||
| Total deposits | 761,388 | 792,497 | (31,109 | ) | 764,856 | (3,468 | ) | 737,528 | 23,860 | |||||||||||||||||||
| FHLB advances outstanding | 23,775 | 24,035 | (260 | ) | 24,035 | (260 | ) | 27,068 | (3,293 | ) | ||||||||||||||||||
| Other liabilities | 3,876 | 3,653 | 223 | 2,344 | 1,532 | 3,439 | 437 | |||||||||||||||||||||
| Total Liabilities | 789,039 | 820,185 | (31,146 | ) | 791,235 | (2,196 | ) | 768,035 | 21,004 | |||||||||||||||||||
| Shareholders' Equity | 95,113 | 94,265 | 848 | 93,774 | 1,339 | 94,064 | 1,049 | |||||||||||||||||||||
| Total Liabilities and Equity | $ | 884,152 | $ | 914,450 | $ | (30,298 | ) | $ | 885,009 | $ | (857 | ) | $ | 862,099 | $ | 22,053 | ||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||
| Average Balance Data | 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||||||||||
| Total loans | $ | 588,108 | $ | 577,662 | 1.8 | % | $ | 586,897 | $ | 583,784 | 0.5 | % | ||||||||||||||||
| Earning assets | 850,277 | 830,838 | 2.3 | % | 848,992 | 836,300 | 1.5 | % | ||||||||||||||||||||
| Total assets | 888,830 | 869,523 | 2.2 | % | 890,911 | 873,534 | 2.0 | % | ||||||||||||||||||||
| Deposits | 765,490 | 742,171 | 3.1 | % | 769,818 | 747,418 | 3.0 | % | ||||||||||||||||||||
| Shareholders' Equity | 94,414 | 93,409 | 1.1 | % | 94,073 | 93,130 | 1.0 | % | ||||||||||||||||||||
| Asset Quality | ||||||||||||||||||||||||||||
| Net charge offs | $ | 1,501 | $ | 2,924 | -48.7 | % | $ | 3,186 | $ | 5,693 | -44.0 | % | ||||||||||||||||
| Non-accrual loans | 25,634 | 28,099 | -8.8 | % | ||||||||||||||||||||||||
| Non-performing loans | 25,876 | 31,237 | -17.2 | % | ||||||||||||||||||||||||
| Non-performing assets | 29,268 | 36,204 | -19.2 | % | ||||||||||||||||||||||||
| Nonperforming loans/total loans | 4.48 | % | 5.43 | % | -17.4 | % | ||||||||||||||||||||||
| Nonperforming assets/total assets | 3.31 | % | 4.20 | % | -21.2 | % | ||||||||||||||||||||||
| Allowance for loan loss/total loans | 3.83 | % | 4.41 | % | -13.2 | % | ||||||||||||||||||||||
| Allowance/nonperforming loans | 85.4 | % | 81.2 | % | 5.1 | % | ||||||||||||||||||||||
| (1) | Business loans include commercial mortgages and tax exempt loans |
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| United Bancorp, Inc. and Subsidiary | ||||||||||||||||||||||||
| Comparative Consolidated Income Statement and Performance Data (Unaudited) | ||||||||||||||||||||||||
| Dollars in thousands except per share data | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
| Consolidated Income Statement | 2012 | 2011 | % Change | 2012 | 2011 | % Change | ||||||||||||||||||
| Interest Income | ||||||||||||||||||||||||
| Interest and fees on loans | $ | 7,852 | $ | 8,131 | -3.4 | % | $ | 15,778 | $ | 16,335 | -3.4 | % | ||||||||||||
| Interest on investment securities | 863 | 893 | -3.4 | % | 1,716 | 1,704 | 0.7 | % | ||||||||||||||||
| Interest on fed funds sold & bank balances | 43 | 67 | -35.8 | % | 97 | 141 | -31.2 | % | ||||||||||||||||
| Total interest income | 8,758 | 9,091 | -3.7 | % | 17,591 | 18,180 | -3.2 | % | ||||||||||||||||
| Interest Expense | ||||||||||||||||||||||||
| Interest on deposits | 985 | 1,309 | -24.8 | % | 2,041 | 2,719 | -24.9 | % | ||||||||||||||||
| Interest on short term borrowings | - | - | 100.0 | % | - | 11 | -100.0 | % | ||||||||||||||||
| Interest on FHLB advances | 207 | 257 | -19.5 | % | 415 | 523 | -20.7 | % | ||||||||||||||||
| Total interest expense | 1,192 | 1,566 | -23.9 | % | 2,456 | 3,253 | -24.5 | % | ||||||||||||||||
| Net Interest Income | 7,566 | 7,525 | 0.5 | % | 15,135 | 14,927 | 1.4 | % | ||||||||||||||||
| Provision for loan losses | 2,550 | 3,100 | -17.7 | % | 4,650 | 5,900 | -21.2 | % | ||||||||||||||||
| Net Interest Income After Provision | 5,016 | 4,425 | 13.4 | % | 10,485 | 9,027 | 16.2 | % | ||||||||||||||||
| Noninterest Income | ||||||||||||||||||||||||
| Service charges on deposit accounts | 449 | 511 | -12.1 | % | 882 | 1,014 | -13.0 | % | ||||||||||||||||
| Trust & Investment fee income | 1,311 | 1,291 | 1.5 | % | 2,536 | 2,554 | -0.7 | % | ||||||||||||||||
| Gains on securities transactions | - | - | 0.0 | % | 4 | - | 0.0 | % | ||||||||||||||||
| Income from loan sales and servicing | 2,592 | 1,619 | 60.1 | % | 4,496 | 2,930 | 53.4 | % | ||||||||||||||||
| ATM, debit and credit card fee income | 559 | 556 | 0.5 | % | 1,066 | 1,069 | -0.3 | % | ||||||||||||||||
| Income from bank-owned life insurance | 106 | 107 | -0.9 | % | 210 | 212 | -0.9 | % | ||||||||||||||||
| Other income | 261 | 311 | -16.1 | % | 842 | 541 | 55.6 | % | ||||||||||||||||
| Total noninterest income | 5,278 | 4,395 | 20.1 | % | 10,036 | 8,320 | 20.6 | % | ||||||||||||||||
| Noninterest Expense | ||||||||||||||||||||||||
| Salaries and employee benefits | 5,221 | 4,767 | 9.5 | % | 10,222 | 9,342 | 9.4 | % | ||||||||||||||||
| Occupancy and equipment expense | 1,320 | 1,291 | 2.2 | % | 2,638 | 2,543 | 3.7 | % | ||||||||||||||||
| External data processing | 267 | 329 | -18.8 | % | 514 | 649 | -20.8 | % | ||||||||||||||||
| Advertising and marketing expenses | 184 | 158 | 16.5 | % | 377 | 318 | 18.6 | % | ||||||||||||||||
| Attorney & other professional fees | 770 | 433 | 77.8 | % | 1,238 | 866 | 43.0 | % | ||||||||||||||||
| Director fees | 97 | 101 | -4.0 | % | 195 | 203 | -3.9 | % | ||||||||||||||||
Expenses relating to ORE property and foreclosed assets | 183 | 254 | -28.0 | % | 1,116 | 511 | 118.4 | % | ||||||||||||||||
| FDIC Insurance premiums | 296 | 302 | -2.0 | % | 591 | 733 | -19.4 | % | ||||||||||||||||
| Other expense | 810 | 866 | -6.5 | % | 1,426 | 1,554 | -8.2 | % | ||||||||||||||||
| Total noninterest expense | 9,148 | 8,501 | 7.6 | % | 18,317 | 16,719 | 9.6 | % | ||||||||||||||||
| Income Before Federal Income Tax | 1,146 | 319 | 259.2 | % | 2,204 | 628 | 251.0 | % | ||||||||||||||||
| Federal income tax (benefit) | 361 | (42 | ) | -959.5 | % | 577 | (92 | ) | -727.2 | % | ||||||||||||||
| Net Income | $ | 785 | $ | 361 | 117.5 | % | $ | 1,627 | $ | 720 | 126.0 | % | ||||||||||||
| Performance Ratios | ||||||||||||||||||||||||
| Return on average assets | 0.36 | % | 0.17 | % | 0.19 | % | 0.37 | % | 0.17 | % | 0.20 | % | ||||||||||||
| Return on average equity | 3.35 | % | 1.55 | % | 1.80 | % | 3.48 | % | 1.56 | % | 1.92 | % | ||||||||||||
Pre-tax, pre-provision ROA (1) | 1.67 | % | 1.57 | % | 0.10 | % | 1.55 | % | 1.51 | % | 0.04 | % | ||||||||||||
| Net interest margin (FTE) | 3.62 | % | 3.69 | % | -0.06 | % | 3.63 | % | 3.65 | % | -0.02 | % | ||||||||||||
| Efficiency ratio | 70.7 | % | 70.7 | % | 0.04 | % | 72.2 | % | 71.2 | % | 0.99 | % | ||||||||||||
| Common Stock Performance | ||||||||||||||||||||||||
| Basic & diluted earnings per share | $ | 0.04 | $ | 0.01 | $ | 0.08 | $ | 0.01 | $ | 0.07 | ||||||||||||||
| Book value per share | $ | 5.88 | $ | 5.81 | $ | 0.07 | ||||||||||||||||||
| Tangible book value per share | 5.88 | 5.81 | 0.07 | |||||||||||||||||||||
Market value per share (2) | 3.40 | 3.25 | 0.15 | |||||||||||||||||||||
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| United Bancorp, Inc. and Subsidiary | ||||||||||||||||||||
| Trends of Selected Consolidated Financial Data (Unaudited) | ||||||||||||||||||||
| Dollars in thousands except per share data | 2012 | 2011 | ||||||||||||||||||
| Balance Sheet Data | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | |||||||||||||||
| Period-end: | ||||||||||||||||||||
| Portfolio loans | $ | 577,279 | $ | 575,508 | $ | 563,702 | $ | 577,600 | $ | 575,296 | ||||||||||
| Total loans | 587,628 | 587,227 | 571,992 | 585,309 | 577,840 | |||||||||||||||
| Allowance for loan losses | 22,097 | 21,048 | 20,633 | 24,357 | 25,370 | |||||||||||||||
| Earning assets | 839,188 | 869,231 | 839,554 | 852,245 | 824,127 | |||||||||||||||
| Total assets | 884,152 | 914,450 | 885,009 | 894,405 | 862,099 | |||||||||||||||
| Deposits | 761,388 | 792,497 | 764,856 | 775,529 | 737,528 | |||||||||||||||
| Shareholders' Equity | 95,113 | 94,265 | 93,774 | 91,806 | 94,064 | |||||||||||||||
| Average: | ||||||||||||||||||||
| Total loans | $ | 588,108 | $ | 585,686 | $ | 582,956 | $ | 583,042 | $ | 577,662 | ||||||||||
| Earning assets | 850,277 | 851,836 | 841,457 | 836,529 | 830,838 | |||||||||||||||
| Total assets | 888,830 | 894,346 | 881,480 | 876,095 | 869,523 | |||||||||||||||
| Deposits | 765,490 | 773,977 | 762,706 | 752,355 | 742,171 | |||||||||||||||
| Shareholders' Equity | 94,414 | 93,732 | 92,122 | 94,159 | 93,409 | |||||||||||||||
| Income Statement Summary | ||||||||||||||||||||
| Net interest income | $ | 7,566 | $ | 7,569 | $ | 7,687 | $ | 7,437 | $ | 7,525 | ||||||||||
| Non-interest income | 5,278 | 4,758 | 4,635 | 4,256 | 4,395 | |||||||||||||||
| Non-interest expense | 9,148 | 9,169 | 8,815 | 9,084 | 8,501 | |||||||||||||||
Pre-tax, pre-provision income (1) | 3,696 | 3,158 | 3,507 | 2,609 | 3,419 | |||||||||||||||
| Provision for loan losses | 2,550 | 2,100 | 250 | 6,000 | 3,100 | |||||||||||||||
| Federal income tax | 361 | 216 | 960 | (1,291 | ) | (42 | ) | |||||||||||||
| Net income (loss) | 785 | 842 | 2,297 | (2,100 | ) | 361 | ||||||||||||||
| Basic & diluted income (loss) per share | $ | 0.04 | $ | 0.04 | $ | 0.16 | $ | (0.19 | ) | $ | 0.01 | |||||||||
| Performance Ratios and Liquidity | ||||||||||||||||||||
| Return on average assets | 0.36 | % | 0.38 | % | 1.03 | % | -0.95 | % | 0.17 | % | ||||||||||
| Return on average common equity | 3.35 | % | 3.61 | % | 9.89 | % | -8.85 | % | 1.55 | % | ||||||||||
Pre-tax, pre-provision ROA (1) | 1.67 | % | 1.42 | % | 1.59 | % | 1.19 | % | 1.57 | % | ||||||||||
| Net interest margin (FTE) | 3.62 | % | 3.62 | % | 3.67 | % | 3.58 | % | 3.69 | % | ||||||||||
| Efficiency ratio | 70.7 | % | 73.8 | % | 70.9 | % | 77.0 | % | 70.7 | % | ||||||||||
| Ratio of loans to deposits | 75.8 | % | 72.6 | % | 73.7 | % | 74.5 | % | 78.0 | % | ||||||||||
| Asset Quality | ||||||||||||||||||||
| Net charge offs | $ | 1,501 | $ | 1,685 | $ | 3,974 | $ | 7,013 | $ | 2,924 | ||||||||||
| Non-accrual loans | 25,634 | 25,958 | 25,754 | 29,392 | 28,099 | |||||||||||||||
| Non-performing loans | 25,876 | 25,971 | 25,785 | 29,778 | 31,237 | |||||||||||||||
| Non-performing assets | 29,268 | 29,455 | 29,454 | 34,079 | 36,204 | |||||||||||||||
| Nonperforming loans/portfolio loans | 4.48 | % | 4.51 | % | 4.57 | % | 5.16 | % | 5.43 | % | ||||||||||
| Nonperforming assets/total assets | 3.31 | % | 3.22 | % | 3.33 | % | 3.81 | % | 4.20 | % | ||||||||||
| Allowance for loan loss/portfolio loans | 3.83 | % | 3.66 | % | 3.66 | % | 4.22 | % | 4.41 | % | ||||||||||
| Allowance/nonperforming loans | 85.4 | % | 81.0 | % | 80.0 | % | 81.8 | % | 81.2 | % | ||||||||||
| Market Data for Common Stock | ||||||||||||||||||||
| Book value per share | $ | 5.88 | $ | 5.82 | $ | 5.78 | $ | 5.63 | $ | 5.81 | ||||||||||
Market value per share (2) | ||||||||||||||||||||
| High | 3.55 | 3.45 | 2.80 | 3.50 | 3.75 | |||||||||||||||
| Low | 3.25 | 2.49 | 2.20 | 2.90 | 3.00 | |||||||||||||||
| Period-end | 3.40 | 3.35 | 2.50 | 2.95 | 3.25 | |||||||||||||||
| Period-end shares outstanding | 12,707 | 12,699 | 12,697 | 12,697 | 12,692 | |||||||||||||||
| Average shares outstanding | 12,701 | 12,697 | 12,697 | 12,696 | 12,692 | |||||||||||||||
7
| Trends of Selected Consolidated Financial Data (continued) | ||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||
| Capital and Stock Performance | 1st Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | |||||||||||||||
| Tier 1 Leverage Ratio | 9.9 | % | 9.8 | % | 9.9 | % | 9.6 | % | 10.1 | % | ||||||||||
| Tangible common equity to total assets | 8.4 | % | 8.1 | % | 8.3 | % | 8.0 | % | 8.6 | % | ||||||||||
| Total capital to risk-weighted assets | 16.4 | % | 16.3 | % | 16.5 | % | 15.6 | % | 16.6 | % | ||||||||||
| Period-end common stock market price/book value | 57.8 | % | 57.6 | % | 43.2 | % | 52.4 | % | 55.9 | % | ||||||||||
(1) | In an attempt to evaluate the trends of net interest income, noninterest income and noninterest expense, the Company calculates pre-tax, pre-provision income ("PTPP Income") and pre-tax, pre-provision return on average assets ("PTPP ROA"). PTPP Income adjusts net income by the amount of the Company's federal income tax (benefit) and provision for loan losses, which is excluded because its level is elevated and volatile in times of economic stress. PTPP ROA measures PTPP Income as a percent of average assets. While this information is not consistent with, or intended to replace, presentation under generally accepted accounting principles, it is presented here for comparison. |
| Management believes that PTPP Income and PTPP ROA are useful and consistent measures of the Company's earning capacity, as these financial measures enable investors and others to assess the Company's ability to generate capital to cover credit losses through a credit cycle, particularly in times of economic stress. | |
(2) | Market value per share is based on the last reported transaction on OTCBB before period end. |
8